CEO Mudassir Sheikh expects recovery in late 2021
Dubai ride-hailing company Careem is laying off 31 percent of its workforce to cope with the impact of Covid-19, which has led to an 80 percent drop in its overall business, according to a letter from its CEO addressing staff.
Coronavirus-related restrictions have also led to a 90 percent drop in the company's ride-hailing business and 60 percent in its delivery business across the Middle East, North Africa and Pakistan.
CEO Mudassir Sheikha expects recovery only in late 2021, and has paused investment plans in mass transport venture Careem Bus mass.
"There is no easy way to say this, so I will get straight to the point: starting tomorrow and for the next three days, 536 of our colleagues who make up 31 percent of Careem will leave us. We delayed this decision as long as possible so that we could exhaust all other means to secure Careem," Sheikha said in the letter.
"Over the last seven weeks the company has looked critically at its cost base and stopped all non-essential spending, which also includes indefinitely halting the new benefits announced earlier in the year. While we have achieved significant savings from these efforts, they have sadly not been enough," he said.
Sheikha said the details vary slightly from market to market, but that Careem has arranged at least three months of severance pay, one month of equity vesting, and extended visa and medical insurance for employees and their families until the end of the year.
The aim of the reorganisation is to make Careem a self-sustaining company by the end of this year, he said without specifying how much Careem would save in costs.
Careem was acquired by US ride-hailing giant Uber in a $3.1 billion deal last year, but said its decision to layoff staff is independent.
Uber is also expected to let as many as 5,400 staff go globally over the next few weeks, according to reports by The Information.