Service Aggregators Uber, Ola, Swiggy and Zomato Continue to See Layoffs

One of the leading aggregators, Uber, announced on May 26 its plan to lay off about 600 employees in India which is about a quarter of its staff in the country. It had to resort to retrenchment, according to the company, as the business has taken a major hit amid COVID-19 pandemic and ensuing lockdown. The development comes days after rival Ola had announced laying off 1,400 people from its rides, financial services and food business.

Like Ola and Uber, food delivery aggregators including Zomato and Swiggy, too, have taken this path. Around 13% of Zomato’s workforce or 520 employees were retrenched in the third week of May. Rest of the employees have to bear a “temporary” cut in salaries as well. Zomato employs around 4,000 workers across the country. 

Zomato’s founder & CEO Deepinder Goyal said in an email that “employees who are being let go will receive half their salaries along with health insurance for the next six months or till they find another job, whichever is earlier”. Goyal also said that their Employee Stock Ownership Plans (Esops), previously allocated, will continue to vest during the period. 

“A large number of restaurants have already shut down permanently, and we know that this is just the tip of the iceberg. I expect the number of restaurants to shrink by 25-40% over the next 6-12 months. What actually happens, for better or worse, is anybody’s guess," Goyal said.

These downsizing and reduction in salaries (as high as 50% in some cases) are aimed at preserving cash amid the uncertainty and the company had enough cash reserves and had brought down monthly cash burn significantly, Goyal added. 

Zomato’s rival Swiggy, however, said it would let go 1,100 employees. 

In the case of Uber, according to the reports, the retrenched employees will be given 10 to 12 weeks of salary, along with medical insurance coverage for the next six months and outplacement support, the company said. These employees, however, are given the option of joining the Uber talent directory.

"The impact of COVID-19 and the unpredictable nature of the recovery has left Uber India South Asia with no choice but to reduce the size of its workforce. Around 600 full-time positions across driver and rider support, as well as other functions, are being impacted," Uber India and South Asia President Pradeep Parameswaran said.

These reductions are part of the previously announced global job cuts this month, he added. 

The lockdowns and pandemic-related restrictions in many countries across the world including India, according to the CEO, had led to an 80% year-on-year decline in Uber’s global business in April. Earlier, for the January-March quarter of 2020 alone, the company announced a $2.9-billion loss.

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Earlier this month, Uber had announced a reduction of customer support and recruiting of teams by approximately 6,700 full-time employee roles of its total workforce of 27,000 and attributed the move to lower trip volumes and current hiring freeze. This move was part of a bid to save $1 billion. Indian workforce accounts for around 8% of its total global strength.

Parameswaran said each impacted employee will receive a minimum 10 weeks payout, medical insurance coverage for the next six months, out-placement support, and will be allowed to retain their laptops and given the option to join the Uber talent directory.

"Today is an incredibly sad day for colleagues leaving the Uber family and all of us at the company. We made the decision now, so we can look to the future with confidence. I want to apologise to departing colleagues, and extend my heartfelt thanks to them for their contributions...," he said.

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Ola CEO Bhavish Aggarwal, in an email to employees last week, had said the company''s revenues had declined by 95% in the last two months due to coronavirus pandemic. He had also made it clear that the prognosis ahead for the business is "very unclear and uncertain" and the impact of this crisis is "definitely going to be long-drawn for us".

The retrenchment reports are not just confined to Ola, Uber, Zomato and Swiggy, many internet businesses — including Oyo, Cure.fit, Udaan, BlackBuck, Treebo, Acko, Fab Hotels, Meesho, Shuttl, Capillary, Niki.ai etc.— have retrenched their workers during this lockdown period.

On the other hand, Zomato and Swiggy have taken up grocery delivery and home delivery of alcohol. According to reports, Zomato has launched grocery delivery across 185 cities in India. They even plan to expand this service to Dubai and Lebanon. Along with this, they have already launched food delivery services in Turkey and takeaways in Australia, New Zealand and Portugal.

"Contactless Dining is the need of the hour for the restaurant industry, and we have already signed up 25,000 restaurants globally," Goyal said. 

Earlier, Swiggy had introduced a service called Swiggy Genie which let you pick up or drop anything during the lockdown. These services include business deliveries, documents, or even sending a lunchbox. 

Uber had also launched a similar service during the lockdown named Uber Connect. The service enables users to send and receive packages within the city, while maintaining social distancing. The service is being offered in nine cities across the country namely, Kolkata, Guwahati, Jaipur, Gurgaon, Delhi, Noida, Chennai, Hyderabad and Chandigarh. 

Zomato and Swiggy have even started home delivery of alcohol in Jharkhand and Odisha. In a statement on May 26, Swiggy said its home delivery service went live in Bhubaneswar and Rourkela on Tuesday after obtaining necessary approvals from the Odisha government, and it plans to expand to other major cities in the state.

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