Uber Cuts Workforce by 14 Percent Due to Plummeting Ride-Hailing Demand
Uber is laying off about 14 percent of its due to the economic toll from COVID-19.
The ride-hailing provider is slashing about 3,700 full-time jobs from its customer support and recruiting teams, according to an SEC filing made on Wednesday. Doing so will reduce Uber’s operating expenses at a time when the pandemic is creating “economic challenges and uncertainty,” the filing adds.
CEO Dara Khosrowshahi told his employees that ride-hailing demand has fallen significantly during the pandemic, according to an email obtained by The New York Times. “Our need for CommOps (community operations) as well as in-person support is down substantially. And with our hiring freeze, there simply isn’t enough work for recruiters,” Khosrowshahi reportedly said.
An Uber spokesperson added: “Since we don’t know how long a recovery will take, we are taking steps to bring our costs in line with the size of our business today. This was a tough decision, but it is the right one to help protect the company’s long-term health and ensure we come out of this crisis stronger.”
The layoffs occur as tech companies across the gig economy have also been slashing staff due to the economic impact from COVID-19. Last week, Uber’s rival Lyft reduced its workforce by 17 percent.
In Uber’s case, the cuts also mean the company is shutting down about 40 percent of its “Greenlight Hubs,” which provide in-person support to Uber drivers in cities across the world. Although the company does expect to rebound from the pandemic, Uber’s spokesperson told PCMag it’s impossible to say when this will exactly occur.
Complicating the company’s business outlook is how the state of California is suing both Uber and Lyft for allegedly depriving their ride-hailing drivers of worker protections, including minimum wage and paid sick leave. California’s lawsuit is demanding hundreds of millions of dollars in restitution for the affected drivers.
Uber’s SEC filing says the company is “evaluating other costs,” suggesting more cuts could occur in the future. The company is scheduled to hold an investor’s call tomorrow on Thursday to discuss its quarterly financial results.
