On Wednesday, India's cab aggregator company Ola said that it will lay off 1,400 of its staff due to uncertainty caused by the coronavirus pandemic.
In a communication sent by the co-founder and CEO Bhavish Aggarwal to the employees of the company, as quoted in a PTI report, he said, "OLA's revenue has come down by 95 percent over the past two months."
He told employees of the company that the business is "very unclear and uncertain" and the impact of this crisis is "definitely going to be long-drawn for us".
"The fallout of the virus has been very tough for our industry in particular. Our revenue has come down 95 per cent over the past 2 months. Most importantly, this crisis has affected the livelihoods of millions of our drivers and their families across India and our international geographies," the CEO said. "The crisis necessitates the need to conserve cash aggressively so that we are able to invest in opportunities in the future," he added.
Those affected by this "one-time exercise" that is scheduled to be concluded this week, will receive 3 months of their fixed salary. These employees can continue using their medical, life and accident insurance cover for themselves and family up to 31 December, Ola said.
Employees of India mobility business, Ola Foods and Ola Financial Services will be impacted by the cost-cutting measures.
The company further said that its lease rental waivers have provided a relief of up to Rs 25,000 per month to more than 30,000 of its driver partners, and zero interest loans through its Ola Sahyog initiative provided support to more than 2 lakh families.
The decision comes as it resumes operations in cities across Karnataka on 19 May, after the state government issued guidelines to allow driver partners to operate three and four-wheelers on the Ola platforms with necessary precautions. However, Ola reportedly did not receive many customers on Day 1 of resume services.