Uber shuts down Mumbai office permanently as part of global cost cuts
After laying-off almost one-fourth of its staff in India (600 employees) in May, ride-hailing firm Uber has shut down its Mumbai office, said a person aware of the development asking not to be named.
Uber’s Mumbai employees will continue to work from home until December, the person said. It is not clear if the employees will be moved to another office in Mumbai next year.
A spokesperson for Uber declined to comment on the development but added that it will continue to provide “a high level of service to all its riders in Mumbai”.
Uber’s Mumbai office closure comes almost a month after the ride-hailing firm announced a global downsizing exercise that affected around 6,700 employees worldwide. The India layoffs affected 600 employees across segments, including customer and driver support, business development, legal, finance, policy, and marketing verticals.
Apart from cutbacks on jobs on jobs in India, Uber seems to be cutting down on property and related rental and lease expenses, as part of its global downsizing process.
Uber’s chief executive officer Dara Khosrowshahi said in a recent conference call that the firm has already planned expenditure cutbacks worth $1 billion due to business disruptions caused by covid-19.
According to Uber Technologies Inc.’s filing with the Securities and Exchange Commission (SEC) in the US in early May, the company has committed to pay up to $145 million worldwide to employees in severance pay and other benefits such as insurance.
This year, Uber India also sold its food delivery business to Zomato. The deal also included UberEats picking up a 10% stake in Zomato. Apart from India, Uber also exited at least eight food delivery markets in the past few quarters as the company looks to turn profitable by end of FY21, according to its SEC filings.
In the first quarter of the current financial year (Q1 2020), Uber’s overall revenue rose 14% year-on-year to $3.54 billion. The company’s net loss widened to $2.9 billion in the reporting quarter, a 163% increase from the $1.1 billion loss reported in the first quarter of 2019.
Uber’s India rival, Ola, also trimmed around 1,400 jobs in May after the coronavirus pandemic severely hit travel and mobility businesses. Apart from ride-hailing firms, vehicle rental startups including Bounce, VOGO, Yulu, Zoomcar, and others have also faced a severe dip in ridership during the three-month lockdown.
Even as both Ola and Uber and urban mobility startups opened up their services in a staggered manner in May, most mobility firms are yet to return to the level of demand they had before the lockdown was introduced in March.