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DUBAI: Careem, a subsidiary of Uber Technologies, has announced that it will cut 31% of the workforce and suspend its mass transit business due to the crisis arising from the coronavirus pandemic.
The announcement came hours after Uber said it was closing its Eats delivery business in various markets, including the Middle East, and laying off dozens of employees.
Careem, which operates transportation and delivery businesses primarily in the Middle East, said it was prioritizing company safety and that parent company Uber continued to believe in its business model and was committed to the region.
“As we have discussed several times in the past few weeks, the COVID-19 crisis has put our dream and future impact at significant risk,” Chief Executive Mudassir Sheikha said in a blog post on the Careem website.
Also Read: Uber Announces Purchase Rival Careem for $ 3.1 Billion
Sheikha, who founded the company in 2012, said the business had fallen by more than 80% and that it was “alarmingly unknown” when it would recover.
“In this new reality, the surest way to secure Careem in the long term is to drive self-sustainability within a reasonable time,” he said.
Careem did not say how much he hoped to save from the layoffs or which business unit personnel had been cut. However, he said the tech colleagues were relatively protected so that he could continue to invest in their products.
Affected employees would receive at least three months of severance pay, one month of capitalization and, in some cases, extended visa and medical insurance, including for family members, until the end of the year.
Careem BUS’s mass transit operation has also been suspended, he said.
Careem has also found “significant savings” by pausing new benefits, he said without disclosing details.
Uber previously announced that it would close its food delivery business in Saudi Arabia, Egypt, and other countries, while its operations in the United Arab Emirates would be moved to Careem.
Global transportation group Uber bought Careem in 2019 for $ 3.1 billion.
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