Uber to Cut 3,700 Jobs as Trips Drop-in Lockdowns

Uber on Wednesday, May 6, announced plans reduce its staff as business plunges following pandemic shutdowns.

About 3,700 fulltime workers will be affected, which is 14 percent of Uber’s workforce, excluding the contract drivers.

The company states that the job losses are part of a planned reduction in operating expenses “in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the company’s business.”

In a letter to staff, CEO Dara Khosrowshahi noted that the cuts will come from community operations and recruiting. Uber will also be closing around 40 percent of its Greenlight locations — used for in-person driver assistance.

Khosrowshahi will also waive his base salary – set at $1m (£809,690) in 2019 – through to the year-end.

The announcements came a day before Uber released its quarterly results and follows a similar move taken by their competitor, Lyft.

Even before the pandemic, Uber was struggling to balance its books, making a loss of $8.5bn in 2019.

Executives in March warned the firm had seen demand for its taxi services fall by more than 60% in coronavirus hotspots, though they said ordering via its Uber Eats food delivery service had increased.

“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,” the firm said in a statement on Wednesday.

Uber’s business is heavily reliant on big cities, including some that have been most affected by the pandemic.

Last year, four metro areas in the US, including New York and San Francisco, and London accounted for 23% of the money spent on the platform.

Analysts called the job cuts “painful but necessary”, noting that both Uber and smaller rival Lyft face long-term difficulties as more people work from home and avoid taxis for fear of infection.

Lyft last week also announced plans to axe about 17% of its workforce or almost 1,000 employees, furlough another 300 people and reduce executive pay. The firm, which is due to share quarterly results later on Wednesday, also cited the impact of the pandemic.

The reductions are a sign that the impact from the shutdowns is continuing to ripple out economies around the world