536 employees will depart Careem in the next three days, starting from May 5th 2020. CEO and co-founder Careem, Mudassir Sheika announced this saddening news on May 4th.
Where corona virus has already hit businesses all around the globe, Careem couldn’t stay safe for long. The ride-hailing company has been dropping the business since March 2020 and it has been crucial for the company to run like this for more. The company had to take this heart-breaking step.
Today the ride-hailing company finally announced that they have to take some strict decisions by laying off 31% of its total workforce.
“Unfortunately, we had to look at our people cost, which is of course the most disruptive change you could make in an organization … that still wants to go after the future opportunities … but still has to survive in the short-term.”
Careem, which was acquired by Uber, had been performing well since the beginning and had provided earning opportunities to thousands of people within its network. The ride-hailing business is one of its kind where not only employees were getting paid for their services but the captains (drivers) registered with the company were also running their household expenses.
With the COVID-19, many of the daily wagers were unable to bring home some good amount of wealth. Users were not travelling and the governments also forbade the company from running is operations.
“In the core ride-hailing, things are very, very challenging across the board,” Mr Sheikha said. “The market is either down more than 90 per cent [in some markets] or more than 80 per cent [in others].”
Beside the loss of business, the company foresee some positive signs. This pandemic has given Careem a good understanding to divert its focus towards its newly-set objective of the super app platform.
“One thing this crisis is doing is that it is accelerating the digital future. We entered this crisis as a ride-hailing company, but we will emerge as the region’s everyday super app,” Mr Sheikha said.
Adding to this, Sheikha announced Careem’s compensation strucuture for it departing employees. The company would compensate the leaving employee a salary of 3 months, with a share of equity and extended visa.
“While the details vary slightly from market to market, we have arranged at least three months of severance pay, one month of equity vesting, and where relevant, extended visa and medical insurance for you and your families until the end of the year”, he wrote.
Where the above compensation structure is mainly for its MENA network, the structure would vary in Pakistan.