Uber CEO Dara Khosrowshahi. Photo: AFP / Indraneel Chowdhury / NurPhoto

Ride-hailing companies in India have been feeling the heat since a countrywide lockdown was imposed to contain the spread of Covid-19. The curbs on transport halted their operations and over two months of being locked down has taken a heavy toll. The lockdown, which has been extended three times, is scheduled to end on May 31.

In the latest development, Uber India announced on Tuesday that it was laying off 600 full-time employees, or nearly 25% of its workforce in the country. The impacted employees are from across the customer & driver support, business development, legal, finance, policy and marketing departments.

The ride-hailing firm said the layoffs are part of previously announced global job cuts. Last week, US-based Uber Technologies – the parent company of Uber India – announced a 23% cut in its workforce, or 6,700 jobs, in a bid to become profitable despite the coronavirus pandemic.

Uber said the retrenched employees would be paid 10 to 12 weeks of salary, continue to have medical insurance coverage for the next six months, and be given outplacement support. Laid off staffers will also be allowed to keep their laptops and have the option of joining the Uber talent directory.

Confirming the development, Pradeep Parameswaran, Uber president for India and South Asia, said, “I want to apologize to departing colleagues and extend my heartfelt thanks to them for their contributions to Uber, the riders, and the driver partners we serve in India.”

Uber chief executive Dara Khosrowshahi had earlier announced a global restructuring program in the wake of lockdowns in several countries, including India, to fight Covid-19. He had pointed out that these restrictions had led to an 80% year-on-year decline in Uber’s global business in April.

For the January-March quarter of 2020, the company announced a $2.9-billion loss, its biggest in three quarters. The ride-hailing app hopes to be profitable by the fourth quarter of 2020. Through global layoffs the company hopes to save around US$ 1 billion.

Last week Uber’s rival Ola had announced that it will be cutting 1,400 jobs. Ola co-founder and CEO Bhavish Aggarwal said the nationwide shutdown has led to a 95% drop in revenues and affected the livelihoods of millions of drivers. The layoffs will be limited to the company’s mobility and food operations in India.

Ola Electric, a separate branch of the company, will not be affected. It will continue to invest in its R&D arm to boost innovation and engineering.

Aggarwal has assured that this will be a one-time Covid-19-related exercise. He pointed out that with work from home being the norm in many companies and people avoiding travel, the impact of this crisis will be long term as the world is not going to return to the way it was before the pandemic anytime soon.