KARACHI: Careem, the Dubai-headquartered ride-hailing company, has reportedly laid off around 150 employees just weeks after its $3.1 billion acquisition by Uber was officially closed.
The news was first reported by MENAbytes and has been confirmed with sources inside the company. An email sent out by Careem CEO Mudassir Sheikha to his employees last week, available with Dawn, says the move has been made to align with the tech giant’s Super app vision.
In December alone, over 60 people parted ways with the company of which Dubai took a clear lead while workers from Pakistan only made up a small proportion of that. Amid financial constraints, Careem has also been forced to exit from Oman and Turkey, where it felt the regulatory environment was not conducive.
According to LinkedIn, Careem has over 3,500 employees of which around 1,100 work in offices across Pakistan.
“The changes mean that some of our colleagues now have different or expanded roles at Careem, and others will leave us today as their roles no longer exist,” the email read.
Elaborating on the reasons for making these choices, the chief executive continues: “Like many technology companies at our stage of growth, Careem is facing two new realities. First, the expansion of our vision from a regional ride-hailing operator to a multi-vertical Super App platform has implications on how we allocate resources and organise ourselves.
Second, our new investors, the public markets, expect companies like us to become profitable after almost a decade of high-growth scale.”
Just two weeks ago, Careem’s Chief Finance and Strategy Officer also announced that he is stepping down in a LinkedIn post. Even below this chain of command, there has been some shake-up as many of the employees were posted to different locations.
“Before the close of Uber deal, some of the colleagues from Pakistan were transferred to different locations, both internally and externally,” a source told Dawn.
Since its inception, Careem, like its parent company Uber now, had been running losses to fuel its growth in new geographies. But this has come at a hefty cost, as they have reportedly burned around $75 million to expand and maintain footprint just in Pakistan, their largest market in terms of rides.
While the profitability has been hard to come by, Careem has also lately faced stiff competition from new entrants in the mobility sector: Airlift and the Egyptian Swvl.
Published in Dawn, January 28th, 2020