SWVL, an Egypt-born and Dubai-based mobility startup, has announced that it plans to lay off 32 percent of its workers.
According to the company’s LinkedIn profile, it employs over 1,330 people. Around 400 employees will lose their jobs as a result of the mobility company laying off nearly 30% of its workforce.
Tech companies, both private and public, have had to face a reckoning in recent months, with their stock valuations falling. An economic downturn has impacted company finances, forcing them to make cost-cutting decisions, the most important of which is laying off staff.
SWVL has had a very busy 18 months leading up to this announcement. The company went public in March after a SPAC merger with Queen’s Gambit Growth Capital, a women-led blank check company based in the United States. It went public at $10 per share with a target valuation of $1.5 billion, but has mostly traded between $4 and $8. It is currently valued at between $500 and $600 million.
According to sources, the layoffs come just a month after SWVL acquired Zeelo, a U.K.-based mass transit company, for $100 million. SWVL has acquired five acquisitions in the last year, including door2door in Germany, Voltlines in Turkey (for $40 million), Shotl in Spain, and Viapool in Argentina.
SWVL said that though these acquisitions have contributed to its overall growth, it will need to make reductions on roles automated by investments in its engineering and product and support functions teams.
“The planned layoffs will impact teams responsible for functions that have been automated following investment in engineering, product and support functions,” SWVL said in a statement.
SWVL said it plans to attain profitability next year. Dismissing hundreds of employees is one way to get there. Others include developing its proprietary technology stack and growing its three models — where it makes $5 million in MRR — across existing and new markets, it said in a statement.
SWVL is present in 13 markets globally: the UAE, Egypt, Kenya, Germany, Spain, Italy, Switzerland, Turkey, Japan, Argentina, Saudi Arabia, Jordan and Pakistan. According to a source, the majority of the layoffs will come from the company’s Dubai and Pakistan offices.
Swvl plans to provide monetary, non-monetary and job placement support to help transition certain of its employees to new roles. As a result of the portfolio optimization program, Swvl’s management currently expects that the company will be cash-flow positive in 2023.