The UAE based ride-hailing service Careem laid off more than 150 employees in an effort to cut down on losses. This roughly makes five percent of the entire workforce Careem employees. The CEO and Co-Founder of Careem, Mudassir Sheikha, stated that the company is trying to modify the skills and shape of its team so that the operations are more efficient. After its rapid expansion, Careem is now focusing on sustainable growth and increasing profitability. This is leading to investing in new and improved technologies and skillsets. The layoffs surfaced a few weeks after the $3.1 billion acquisition was closed with Uber. Last year in December, some sixty people left the company; however, a small number of those people belonged to Pakistan. The CEO of Careem is calling the new vision of the company “the Super App Vision.”
In changing the form of the organization, around 15 percent of the entire workforce will get affected. Approximately 10 percent are going to be reassigned with new roles, and the remaining 5 percent are being laid off. This is because, for these 5 percent of employees, there are no roles left in the company. The CEO of Careem bode farewell to laid-off employees in a warm manner and urged the industry to hire them or partner with them. The CEO of Careem went on to assert that these are real people and decided to lay them off is not an easy one. People who are axed from their jobs are mostly product managers, engineers, and data scientists.
The new owner of Careem, Uber, has already laid off around 1,000 people in the third quarter of 2019 across the globe. The aggressive expansion strategies always require severe cost-cutting for growing companies. This is what both Uber and Careem are doing as they venture into new markets. In the Pakistani market, Careem and Uber are facing competition from new entrants like Airlift and Swvl. Moreover, both Careem and Uber incurred astronomical costs in the growth and expansion phase.
At this point, the investors in Careem want the company to be profitable. Shareholders in the company want to see increased profitability through efficient operations. Therefore, making the company efficient and discontinuing unnecessary roles in the company has become necessary for survival. Careem has experienced almost a decade of high-growth in the markets in which it ventured, including Pakistan. Reportedly, Careem has spent more than $70 million in Pakistan alone to grow and sustain its footprint in the ride-hailing sector.
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