So much for being the “best company to work at”. The billion-dollar company announced the steps it was taking to counter the economic impact of COVID-19. Apparently, the company could not weather a crisis that hit just 2 weeks ago.
KeepTruckin is a Google Ventures backed, well funded Unicorn that provides electronic logging devices for trucks. The company laid off about one-fifth of it’s global workforce. In an internal email, KeepTruckin CEO Shoaib Makani announced that they were letting go 349 of its 1900 employees. The KeepTruckin Pakistan staff also included some names that were laid off.
KeepTruckin has 2 offices in Pakistan, one in Lahore and another in Islamabad. Employees who were let got were given one month advance salaries.
The employees who were retained will not be receiving their last year’s bonuses. That’s right! The bonus earned by employees LAST YEAR has been cancelled because we were hit by a crisis just 2 weeks ago. Makes perfect sense.
The CEO will not be taking any salary till the pandemic is over. Other 2 co-founders were gracious enough to cut their salaries to half.
These were some of the measures that KeepTruckin CEO Shoaib Makani announced in his letter to employees. Here are the steps he announced:
- We will not be paying out the 2019 company bonus.
- We will be reducing salaries by 10% for all employees whose annual compensation is greater than $50,000
- We are aggressively looking for opportunities to reduce cost across the organization including software licenses, inventory holding costs, office leases, and capital expenditures.
- Our co-founders, Ryan Johns and Obaid Khan, will be taking 50% cuts to their pay.
- I will be taking no pay until we get through this.
Here is a copy of the letter that the CEO also shared with FreightWaves.
Reasons for cost-cutting measures
KeepTruckin is doing well. They’re still profitable and are valued at $1.4 billion. So what makes them fire 18% of their global workforce. Here are some of the reasons stated by Shoaib Makani in his email:
- Per KeepTruckin’s data science team, there is 10% reduction in vehicle activity over our network over the past two weeks
- More than 20% drop in activity in New England and the West Coast
- Meaningful increase in churn in April and May due to small trucking companies going out of business or pausing their operations
- Lower rates of new customer acquisition
Could it really be due to COVID-19 driven economic contraction? Or maybe they had over-hired and were now cutting back to the size? Whatever the case may be, the company has tarnished its reputation. At a time when companies like lululemon are still paying their employees despite having closed stores since 3 weeks. Laying off employees in anticipation of not being able to win new customers sounds like a joke.
