The impact of the ongoing global Covid-19 pandemic sees Uber announce that it will cut 3,700 jobs, or 14 percent of its workforce
The ‘brutal’ impact of the global Coronavirus pandemic on Uber’s ride-hailing services has resulted in the firm warning it will shed jobs.
Uber said in a filing on Wednesday that the firm will cut approximately 3,700 full-time employee roles, or roughly 14 percent of its workforce.
The announcement is hardly surprising considering the economic impact the pandemic is reaping on the world. In the United States alone, over 30 million Americans are seeking unemployment benefits.
In its filing, Uber announced its plans to reduce its operating expenses in response to the economic challenges and uncertainty resulting from the Covid-19 pandemic and its impact on its business.
“Due to lower trip volumes in its Rides segment and the Company’s current hiring freeze, the Company is reducing its customer support and recruiting teams by approximately 3,700 full-time employee roles,” said Uber.
“In connection with these actions, the Company estimates that it will incur approximately $20 million related to severance and other termination benefits,” it said. “The Company is evaluating other cost and will provide an update in subsequent SEC disclosures regarding such amounts, if material.”
Uber CEO Dara Khosrowshahi agreed to waive his base salary for the remainder of the year.
Khosrowshahi went further in a email to Uber’s workforce, seen by CNN Business.
“Days like this are brutal. I am truly sorry that we are doing this, just as I know that we have to do this,” Khosrowshahi reportedly wrote in the email.
And Khosrowshahi also hinted that there may be more changes to come.
“As I said at yesterday’s All Hands, this is one part of a broader exercise to make the difficult adjustments to our cost structure (team size and office footprint) so that it matches the reality of our business (our bookings, revenue and margins),” he wrote. “We are looking at many scenarios and at each and every cost, both variable and fixed, across the company.”
The Uber layoffs comes after rival Lyft last week said it would be cutting 1,000 workforce and furloughing hundreds more as it also grapples with the impact of the ongoing pandemic on people using its ride-hailing services.