Uber Technologies' Careem subsidiary said on Monday it was cutting 536 jobs this week, representing 31% of the Dubai-headquartered company's workforce.
The announcement came hours after Uber said it was shuttering its Eats delivery business in several markets, including the Middle East, and laying off dozens of staff.
Careem, which operates ride-hailing and delivery businesses primarily in the Middle East, said it was prioritising the security of the company and that parent Uber continued to believe in its business model and was committed to the region.
"As we have discussed several times in the last few weeks, the crisis brought on by COVID-19 has put our dream and future impact at significant risk," Chief Executive Mudassir Sheikha said in a blog on Careem's website.
Sheikha, who founded the company in 2012, said business was down by more than 80% and that it was "alarmingly unknown" when it would recover.
"In this new reality, the surest way to secure Careem for the long term is to drive towards self-sustainability within a reasonable time frame," he said.
Careem did not say how much it expected to save from the layoffs or which business units staff had been cut from. However, it said tech-colleagues were protected in relative terms so it could continue to invest in its products.
Affected employees would receive at least three months severance pay, a month of equity vesting and in some cases extended visa and medical insurance, including for family members, until the end of the year.
The Careem BUS mass-transportation operation has also been suspended, it said.
Careem has also found "significant savings" from pausing new benefits, it said without disclosing details.
Uber earlier announced it was closing its food delivery business in Saudi Arabia, Egypt and other countries, while its United Arab Emirates operations would move to Careem.
Global ride-hailing group Uber bought Careem in 2019 for $3.1 billion.