Following the prolonged lockdown that has gripped the world in light of the ongoing Coronavirus pandemic, it was only time before this would have happened. Careem is officially letting go of 31% of its staff, equivalent to 536 employees.
With entire populations in self-quarantine, businesses closed and citizen movement restricted, companies like Careem are among the most vulnerable to sustained losses. After an extended silence, and a failed comment request attempt by AMEinfo last month, Careem has come forth with the difficult news.
The impact on their business has been catastrophic: Careem’s core ride-hailing business is down by as much as 90% and its delivery business by 60% in some of the markets it operates in, co-founder and CEO Mudassir Sheikha told The National.
As for their overall business, it “is down 80 per cent and with that sort of reduction in the business, our losses are multiplying rapidly as well,” Sheikha continued to the newspaper.
Sheikha broke the news to staff in a heartfelt letter you can find here.
“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% of Careem will leave us. We delayed this decision as long as possible so that we could exhaust all other means to secure Careem,” he said in the letter to staff.
He continued: “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.”
Tech colleagues were less affected, and will continue to focus on the company’s products.
According to the letter, departing staff will receive the following:
“While the details vary slightly by market, we have arranged at least three months of severance pay, one month of equity vesting, and where relevant, extended visa and medical insurance for you and your family until the end of the year. We are also offering a set of resources including counseling that can help you get through this event and find your next professional opportunity.”
All of these reorganisational actions are in an attempt to make Careem self-sustaining by the end of 2020, Sheikha explained to the UAE newspaper. No financial figures were supplied, however.
Elaborating on the company’s future further, which involves suspending their Careem BUS service, Sheikha’s letter detailed the following:
“The economics of the mass transportation business have improved but remain challenging, and at this time, we need to accelerate our investments in deliveries and the SuperApp. We believe Careem BUS is a much-needed offering in some of our core markets, and I predict that the service will reappear on the Careem Super App in the future.”
Careem was purchased last year for $3.1 billion by a former rival, US ride-hailing firm Uber. The acquisition was completed this year, and Careem was allowed to maintain operations under its own brand.
Just prior to Sheikha’s announcement, the US company’s food delivery arm Uber Eats announced that it would be closing down its business in Saudi Arabia, Egypt and other countries, while its United Arab Emirates operations would move to Careem, according to Reuters.