Uber Lays off a Quarter of Its India Workforce Amid COVID-19 Crisis

The move is part of the global restructuring plan announced by the Uber chief executive in view of the company’s stressed fortunes amid lockdowns in several countries.

New Delhi: Uber India on Tuesday announced it was laying off 600 of its employees – a fourth of its total headcount of 2,400 in the country – across customer and driver support, business development, legal, finance, policy and marketing verticals.

The retrenched employees would be paid 10 to 12 weeks of salary, besides medical insurance coverage for the next six months and outplacement support, the company said. These staffers would also be allowed to retain their laptops and given the option of joining the Uber talent directory.

“Today is an incredibly sad day for colleagues leaving the Uber family and all of us at the company. We made the decision now so that we can look to the future with confidence. I want to apologise 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,” said Pradeep Parameswaran, Uber president for India and South Asia, confirming the development.

The move is part of the global restructuring plan announced earlier by Uber chief executive Dara Khosrowshahi in view of the company’s stressed fortunes amid lockdowns in several countries, including India, to prevent the spread of coronavirus. These restrictions, according to the CEO, 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. Uber had earlier advanced its target of achieving a measure of profitability by a year, and was hoping to be in the green by the fourth quarter of 2020.

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In his back-to-back announcements this month, the CEO of the embattled vehicle aggregator said the company would retrench over 6,700 employees, or 25% of its 27,000-strong workforce, across the globe, in a bid to save $1 billion. India accounts for around 8% of its total global employee strength.

Uber has been pushing hard to turn profitable in India, one of its key markets. It has divested itself of some non-core businesses to concentrate on transportation. In January this year, it sold its food delivery business Uber Eats to Zomato to cut its losses, in exchange for a 9.9% stake in the latter. As many as 245 employees were affected by the deal and were kept on rolls of the company only for a short duration. The company also withdrew offers made previously at management institutes across the country, in a clear indication that it was looking to reduce headcount.

Even as it faces stiff competition in the country from arch rival Ola, Uber maintains it has category leadership in the Indian market. Recently, Ola also announced it was laying off over 1,400 employees. Both Ola and Uber have a common investor in Softbank.

Uber India’s operations have been hit severely by the nationwide lockdown, imposed first on March 24 and extended thrice until May 31. However, the company has sought to limit the damage through innovations like Uber Medics, a transportation service for health workers across cities in collaboration with the National Health Authority. It has also tied up with companies like Flipkart to offer last-mile delivery through cab drivers. With some relaxation in lockdown rules since May 18, Uber has also resumed its services in 50 of the 70-plus cities that it operates in.

By arrangement with Business Standard.