Ride-hailing service provider Ola on Wednesday announced that it will lay off 1,400 of its staff. In a note to the company's employees, CEO Bhavish Aggarwal said the coronavirus pandemic hit Ola's revenues. The layoffs at Bengaluru-based Ola Cabs come as the country remains in the fourth phase of a nationwide lockdown to curb the spread of the coronavirus pandemic, which has pushed the economy into a standstill and forced many businesses to trim operations.
Here is the full text of Ola CEO Bhavish Aggarwal's letter to its employees:
Ever since my last email to you 6 weeks ago, I had hoped to write again soon in better times. Unfortunately, the COVID crisis continues to unfold all around us causing unprecedented economic and social destruction. It has also become evident that the coronavirus will not be eliminated any time soon. We will rather have to learn to live with the virus and resultant implications.
In these circumstances, today I write to all of you with the toughest decision I have ever taken - the need to downsize our organization and let go of 1400 of our valued employees.
We had all hoped in the beginning that this would be a short-lived crisis and that its impact would be temporary. Over the past couple of months, all members of our extended leadership team have taken significant salary cuts to be able to help the organization delay tougher people decisions as we waited for the situation to evolve. But unfortunately, it's not been a short crisis. And the prognosis ahead for our business is very unclear and uncertain. It is going to take a long time for people to go out and about like before. With more companies preferring to have a large number of employees work from home, air travel limited to essential trips and vacations being put off for better times, the impact of this crisis is definitely going to be long-drawn for us. The world is not going to revert to the pre-COVID era anytime soon. Social distancing, anxiety, and an abundance of caution will be the operating principles for everyone.
The fallout of the virus has been very tough for our industry in particular. Our revenue has come down 95% 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. In this moment, various teams across the group have pursued, in spite of the many constraints, to serve drivers, citizens, and the nation at large. Here are some of the highlights:
Initiatives for Driver Partners: Our lease rental waivers for over 30,000 leasing drivers gave them relief of up to Rs. 25,000 a month. Over 200,000 driver families benefited from our Zero interest loans (Ola Sahyog) to support their household expenses during this time, in addition to COVID Insurance for them and their spouses in India and a COVID Fund for international markets.
Drive The Driver Fund: Through generous individual and institutional contributions, over 1 mn kgs of essential supplies have been distributed and over 500 medical emergencies for drivers and families including pregnancies, dialysis, cancer-care and neonatal cases have been financially supported. This has been very meaningful and timely for the driver community across the country and the stories of hope due to this support the drivers are sharing with us are deeply moving.
Citizen Initiatives: Serving our frontline heroes braving the crisis and citizens in need are core to our philosophy of helping the community at all times. We launched Ola Emergency in over 20 cities across the country and partnered with various state governments to serve healthcare workers and doctors. We served the NHS workers in the UK with discounted rides. We offered food to tens of thousands of migrant manpower in various cities and helped distribute relief material in London with the Mayor's office. Ola CONNECTS, our technology platform to support governments and public service organizations to fight COVID is being used by farmers in large states, and being considered for more use cases, even internationally for public good.
We have done everything in our means to support those around us in these difficult circumstances. These initiatives reflect our collective values of strong community focus and being customer-first, even in the wake of a crisis. It is important that we preserve and cherish these values as we look ahead, even as we continue to do the right things for the organization and all our stakeholders to be able to emerge stronger in the long run.
This downsizing exercise has been a very tough and sad decision for the entire management team to make. I have personally spent significant time, reviewing and revisiting every single aspect of this exercise as each one of the impacted individuals has played an important role in building Ola and are the most talented and passionate people I have come across. These decisions are not reflective of anyone's performance and are purely a function of the uncontrollable circumstances that we have been faced with.
Between today and Saturday, our HR team will have 1:1 conversations with each and every one of the impacted individuals. While nothing can take the emotional trauma away for those of our colleagues who will be leaving, we have tried to bring together a comprehensive benefits plan that will ensure that every single team member affected is given maximum support on all fronts - financial, healthcare, emotional, and career-support.
Financial Support: Every affected employee will receive a minimum financial payout of 3 months of their fixed salary, irrespective of the notice period. Beyond this, those employees who have spent significantly more time with us will be eligible for higher payouts depending on tenure.
ESOPs Vesting: All eligible ESOPs will vest forward to the closest quarter. For those who may not have completed a year, as an exception, we will enable pro-rated vesting for the period of time spent with us.
Insurance: All affected employees will be able to continue using their medical, life and accident insurance cover for themselves and their families up to 31st Dec 2020 or the start of their next job whichever is earlier, to help minimize the financial burden of health and other risks in a time like this.
Medical Insurance for parents: We are all worried about our parents in a time like this. Hence we have taken a decision to offer medical insurance for up to 2 parents (or in-laws) to each employee. This parental insurance will cover parents for all pre-existing ailments up to the age of 90, for a sum of Rs. 2 lakhs. This insurance will continue for all our departing colleagues till 31st Dec 2020 or the start of their next job whichever is earlier. We are also extending this cover to all those who continue to stay with us.
Healthcare & Emotional Wellness: We are extending unlimited access to health and wellness support through our respective third party partnerships, through to the end of the year. This will enable instant access to leading doctors for employees and their families as well as coaching and one on one counselling support from experts.
Career Support: While we have made every possible effort to accommodate as many affected team members in open roles in our other group companies, we are rallying the support of the Ola Talent Acquisition team to help with outplacement support for as many people and in helping find suitable roles for them outside of Ola. In addition to this, we are also allowing all company-issued laptops (primary work devices) to be retained by affected employees.
To every employee who is leaving us, I would like to express my gratitude and reiterate that your contributions to the organization are extremely valuable and that you will always be an integral part of Ola's journey. This will be a one time exercise and will be complete by the end of this week for our India Mobility business and by the end of next week for Ola foods and Ola Financial Services. No more COVID related cuts will be done after this exercise.
This crisis necessitates the need to conserve cash aggressively so that we are able to invest in opportunities in the future. While we restructure our organization to the new realities of our business, we are also going to recommit ourselves to strengthening our operational excellence and leverage a lot more technology to improve efficiencies and reduce cost across all parts of our business. We are increasing our investments and adding people capabilities in R&D across the group through this crisis to double down on innovation and engineering.
Mobility will always be at the heart of human progress. Formats will evolve depending on context - personal, shared, public transit, or the niches in between. This pandemic has only highlighted the need for each of us to have safe and reliable mobility solutions. As economic activity returns, so will the need for mobility, but the paradigms will have changed. This crisis is accelerating macro trends of digital commerce and clean mobility, and our businesses are well-positioned to leverage these macro trends well.
This is an opportunity for us to envision a new future of safe, efficient, and clean mobility, and recommit ourselves towards building this future. As I mentioned, we will be increasing our investment into R&D and innovation in this period and pursuing our dreams and ambitions with even more determination.
I'm filled with a lot of emotion and sadness as I write this email, but also with strong hope and resolve to rebuild our business, and create the future that we envision, together.