Yesterday, Swvl announced the suspension of its intra-city rides in Kenya citing the global economic downturn. Meanwhile, its inter-city option already stopped operating on May 30, 2022.
Since its launch in Kenya in 2019, Swvl operates three solutions—Swvl Daily, for intracity rides in Nairobi, Swvl Travel for intercity rides and Swvl Business for organisations, corporations and private entities. Despite the suspension of intracity and intercity rides, Swvl Business will still be operating.
With the partnerships of over 500 bus owners, Swvl covers 300 routes to over 55 destinations in Kenya. This recent decision will affect about 100 staffers involved with the Kenyan operations. Swvl has also shut down its operations in Pakistan.
A few days ago, Swvl announced its plan to lay off 32% of its workforce to optimize its operations. 'The reduction follows an extensive evaluation of team redundancy and how this complements our strategy," Swvl's CEO, Mostafa Kandil said.
As part of its efforts to stem expenses amidst the global downturn, Swvl said that it will do the following: voluntary salary deductions from the top management team, reduction of current office spaces, freezing its current hiring program, freezing travel and accommodation expenses and tying expenditures to essential business requirements.
Swvl is present in 13 markets globally: the UAE, Egypt, Kenya, Germany, Spain, Italy, Switzerland, Turkey, Japan, Argentina, Saudi Arabia, Jordan and Pakistan. However, TechCrunch said that the majority of the layoffs will come from the company’s Dubai and Pakistan offices.
Swvl is not alone in the struggle to stay afloat amidst the downturn. Like Y Combinator said to its portfolio founders, "If the current situation is as bad as the last two economic downturns, the best way to prepare is to cut costs and extend your runway".
Aside from Swvl, other companies like Meta, Uber, and Paypal have either downsized their teams or paused hiring. As of May, the world’s largest technology companies have shed over $1 trillion in value in just three trading sessions, venture capital funding has also slowed down globally.