Layoff Season In Previously Booming Startups

Startups

Major startups across the world witnessed a slump in business owing to the lockdown imposed to curb Coronavirus spread. However, the startups have shown variety in their dealing with employees.
Complete Coverage: Coronavirus

Crux of the Matter

Indian Startups
Ola
Ola witnessed a revenue drop of 95% since the lockdown started in 2020. As social distancing and decrease of travel would prevail even after lockdown, Ola laid off 1,400 (35%) of its employees by email. However, the company said they would be receiving 3 months’ salary and insurance coverage.

Swiggy
Similarly, Swiggy laid off 1,100 (13%) of its permanent employees by email who would receive 3 months’ salary and insurance coverage. After a loss of Rs 2,367 crore in 2019, Swiggy saw further loss due to the lockdown.

Covid hit us with huge blow of uncertainty, forcing us to look even harder at our cost base and preparedness for the road ahead.

Swiggy

OYO
Already suffering a net loss of $335 million in 2019, OYO’s revenue dropped by 50-60% in 2020 due to the lockdown. It would be laying off 5,000 employees across the world.

Recession to Recession
Lyft
The ride-sharing company already oversaw a net loss of more than $2.6 billion in 2019, which worsened due to the lockdown. It decided to lay off 982 (17%) of its employees.

Uber
The cab-giants had to close down 45 of their offices as they suffered further loss by lockdown restrictions, which decreased their passenger revenue by 80%. It is in the process to lay off ~500 employees in India. The company has already fired around 6,700 employees.

We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill. Airbnb’s business has been hit hard…Some very sad news. Today, I must confirm that we are reducing the size of the Airbnb workforce.

Brian Chesky, Airbnb Co-founder and CEO

Airbnb
One of the fastest-growing startups, the property lending agent suffered a loss of $674 million in 2019. Its woes were severed by the lockdown, which reduced its booking rates by 85% and increased the cancellation rate to 90%. It laid off nearly 25%, 1900 of its employees.

Facing The Storm
On the other hand, some companies have endured the lockdown well without laying off any employees.

UrbanClap
Formerly known as UrbanClap, the company has not laid off any employee. They have provided interest-free loans to more than 22,000 of its service employees in the pandemic. They have also introduced ‘Suraksha Holidays’, where a worker feeling unwell can take leave and receive Rs 500 daily.

HCL
The tech giants have not fired any employee of their total 150,000-employee workforce. They have not cut the workers’ salary either and will provide the bonuses as promised earlier. Moreover, they would also be honoring the contracts of freshers.

Curiopedia
  • Silicon Valley is a region in the San Francisco Bay Area in Northern California that serves as a global center for high technology, innovation, venture capital, and social media. The area is home to many of the world’s largest high-tech corporations, including the headquarters of more than 30 businesses in the Fortune 1000, one-third of all of the venture capital investment in the United States and employees about a quarter of a million information technology workers.
  • Walter Anthony Barringer Dinteman is a retired sales executive who drives for Uber as a retirement Job. In 2018, Walter published his book “Uber and Out” which is a compilation of stories gathered from his experience as an Uber driver.
  • Softbank is an investor in both Uber and Ola. Softbank’s Vision Fund is the world’s largest technology-focused venture capital fund, with over $100 billion in the capital.
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