Ride-hailing company Careem is shedding 536 jobs - or 31 per cent of its workforce - to blunt the impact of the coronavirus-related economic slump on its business across the Middle East, North Africa and Pakistan.
The company's overall business has dropped 80 per cent in the wake of measures to stem the pandemic and its chief executive does not see a recovery until late next year. Careem's core ride-hailing business is down by as much as 90 per cent and its delivery business by 60 per cent in some of the markets it operates in, Mudassir Sheikha, told The National.
“With that sort of reduction in the business, our losses are multiplying rapidly as well,” Mr Sheikha, who is also a co-founder of the Dubai-based firm, said.
The job cuts will see Careem reduce its headcount across the board, according to Mr Sheikha’s blog post to Careem employees.
"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 per cent of Careem will leave us. We delayed this decision as long as possible so that we could exhaust all other means to secure Careem," Mr Sheikha wrote.
The company has also paused further investments in its mass transport 'Careem BUS' venture as it tries to conserve cash to ride out the storm.
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 wrote.
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.
“We think that this is a conservative assumption [about business recovery] and we are happy to be wrong about it,” Mr Sheikha said. “Hopefully the recovery is a bit earlier than expected but … if it takes longer and this crisis deepens, then we will have to go back to the drawing board and look at things [again]”, he said when asked if he expects another round of layoffs during the crisis.
Its parent Uber said on Monday that it would shut its food delivery app in the UAE and roll it into Careem’s.
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If you go...
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PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
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