Middle East ride-hailing firm Careem on Tuesday set about slashing nearly a third of its workforce due to the severe economic impacts of the coronavirus pandemic, its CEO said.

"Starting tomorrow... 536 of our colleagues who make up 31 percent of Careem will leave us," Mudassir Sheikha said in a statement released late Monday. "Our business is down by more than 80 percent and the recovery timeline is alarmingly unknown."

Dubai-based Careem, acquired by Uber last year for $3.1 billion in the Middle East's biggest technology transaction, operates taxi-hailing apps in 14 countries across the Middle East and North Africa. But as part of measures to prevent the spread of coronavirus, almost all countries in the region have resorted to massive shutdowns, paralysing businesses.

Many companies have resorted to staff and salary cuts while some have furloughed employees. Careem's decision came shortly after its parent, Uber, said it would discontinue its Uber Eats restaurant delivery service in seven markets, including Saudi Arabia, next month. "The crisis brought on by COVID-19 has put our dream and future impact at significant risk," Sheikha said.

Sheikha said Careem has over the past several weeks reduced or stopped non-essential spending and indefinitely suspended staff benefits. But he said the measures "have sadly not been enough".

As part of the cost-saving measures, the mass-transportation Careem BUS was also suspended, he added. Sheikha said sacked employees would receive benefits including at least three months of severance pay and medical insurance until the end of the year.

The International Monetary Fund forecast last month that debt, unemployment and budget deficits in the MENA region would spike amid a potentially long-lasting recession.