Careem lays off 31 percent of its workforce as business takes a big hit due to Covid-19

Dubai-headquartered ride-hailing (super-app) company Careem that was acquired by Uber earlier this year is laying off 536 of its employees which make up 31 percent of its workforce. The decision was first announced by company’s co-founder and CEO Mudassir Sheikha in an online meeting with the employees.

“We delayed this decision as long as possible so that we could exhaust all other means to secure Careem,” said the company’s CEO in a note to employees, adding that the Covid-19 has put their dream and future impact at significant risk.

“Our business is down by more than 80% and the recovery timeline is alarmingly unknown. Our parent company Uber, believes in our Super App vision and is committed to the region, but like others in the industry, is also impacted by the crisis. In this new reality, the surest way to secure Careem for the long term is to drive towards self-sustainability within a reasonable time-frame,” explained the note.

Careem’s core ride-hailing business is suspended in most of the markets where it operates. Wherever the service is still operational, the demand has been extremely low as people are staying indoors.

The company hasn’t shared the breakdown of the layoffs by the market (geography) or function but the note by Mudassir Sheikha suggests that the non-tech employees have taken the biggest hit. “[We] made a distinction between tech and non-tech colleagues; the idea being to protect our tech colleagues in relative terms so that we can continue to invest in our products, and emerge from the crisis with even better products,” said the note.

Mudassir who co-founded Careem in 2012 with Magnus Olsson and sold it to Uber for $3.1 billion also sought forgiveness of the employees for having to let them go, “Forgive us for prioritizing Careem’s security above you, and for any mistakes that we may have made in the process. Many of you will hopefully remain life-long friends and partners in the future.”

The Dubai-based company that operates all around the region had laid off over 150 employees earlier this year in a move to cut costs and support its expansion strategy. With these latest cuts, the company has now laid off about 700 employees within the last six months.

Careem’s parent company Uber reportedly (paywall) is also discussing plans to lay off 20 percent of its workforce.