536 employees will depart Careem within the next three days, ranging from May 5th, 2020. CEO and co-founder Careem, Mudassir Sheika announced this saddening news on May 4th.
Where the corona virus has already hit businesses all round the globe, Careem couldn’t stay safe for long. The ride-hailing company has been dropping the business since March 2020 and it’s been crucial for the corporate to run like this for more. Careem had to require this heart-breaking step.
Today the ride-hailing company finally announced that they need to require 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 foremost disruptive change you’ll make in a company … that still wants to go after the longer-term opportunities … but still has to survive within the short-term.”
Careem, which was acquired by Uber, had been performing well since the start and had provided earning opportunities to thousands of individuals within its network. The ride-hailing business is one among its kind where not only employees were getting purchased their services but the captains (drivers) registered with the corporate 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 weren’t traveling and therefore the governments also forbade the corporate 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 over 90 percent [in some markets] or over 80 percent [in others].”
Besides the loss of business, the corporate foresee some positive signs. This pandemic has given Careem a decent understanding to divert its focus towards its newly-set objective of the super app platform.
“One thing this crisis is doing is that it’s accelerating the digital future. We entered this crisis as a ride-hailing company, but we’ll emerge because of the region’s everyday super app,” Mr. Sheikha said.
Adding to this, Sheikha announced Careem’s compensation structure for its departing employees. Careem would compensate the leaving employee a salary of three months, with a share of equity and extended visa.
“While the details vary slightly from market to promote, we’ve arranged a minimum of 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 top of the year”, he wrote.
Where the above compensation structure is especially for its MENA network, the structure would vary in Pakistan.