As several emerging technology-enabled businesses reel under challenges posed by the Covid-19 pandemic, companies have resorted to layoffs and furloughs to cut costs.
The latest companies to follow the trend are ride hailing company Uber, interior design marketplace Livspace and shared office space provider WeWork India -- all of which have witnessed significant reduction in demand for their primary product offerings.
San Francisco headquartered Uber Technologies is set to cull an additional 3,000 jobs, as per a filing with the US Securities and Exchange Commission (SEC) on Monday.
The development comes two weeks after the company said it would lay off 3,700 full-time employees across divisions of customer support and recruitment.
The job cuts are expected to save the company at least $1 billion annually, compared to its original Q4 2020 planned cost structure, according to the filing. However, the firm expects to spend between $210 million and $260 million on site closures, severance and stock-based compensation, it showed.
“Given the dramatic impact of the pandemic, and the unpredictable nature of any eventual recovery, we are concentrating our efforts on our core mobility and delivery platforms and resizing our company to match the realities of our business,” Khosrowshahi said in the regulatory filing.
The Embassy Group-run Indian unit of co-working space provider WeWork, another SoftBank portfolio company, has “realigned certain functions and teams” to stay on course of its profitability plans in early 2021.
“While decisions that impact our people are some of the hardest to make, we believe that this step is required to build an effective and sustainable structure that supports the company and our members in the long term,” WeWork India CEO Karan Virwani told TechCircle.
The company declined to comment on the specifics of the “realignment” plans.
Late last month, a group of 40 companies in the Indian shared workspace business formed the Indian Workspace Association (IWA) to demand government support, a landlord rent waiver and service provider discounts.
IKEA-backed home decor startup Livspace also witnessed the impact of the Covid-19 crisis on its business. It has laid off 450 employees, or 15% of its total workforce, according to a statement.
“We have extended their medical cover, have offered a monetary package to help them in these times, and we have also set up an outplacement cell,” co-founder and CEO Anuj Srivastava told TechCircle on Tuesday.
Other startups that have laid off or placed employees on furloughs in the startup space during the Covid-19 lockdown include hospitality services startups OYO, Airbnb, Ixigo and RateGain; fintech startups Kabbage, Acko and BharatPe; online food delivery platforms Zomato and Swiggy; bike rental platforms Bounce and Vogo; business-to-business ecommerce platform Udaan; lifestyle and fitness startup Cure.fit; and social commerce startup Meesho.