Uber is to cut 3,700 jobs, roughly 14 per cent of its corporate workforce, blaming the drop in business because of coronavirus.
In a staff memo seen by the Financial Times, chief executive Dara Khosrowshahi warned additional cuts would be announced in due course as the company made "difficult adjustments" to match "the reality of our business".
“We are looking at many scenarios and at each and every cost, both variable and fixed, across the company,” said Mr Khosrowshahi, who has waived his base salary for the remainder of the year. “You can expect we will have a further, final update for you within the next two weeks.”
The car-booking service joins a string of major Silicon Valley names making deep cuts. Last week, rival group Lyft said it would cut 17 per cent of its workforce. On Tuesday, home-sharing site Airbnb said it planned to lay off 25 per cent of its staff as it focused on its core home-sharing business.
Uber’s job cuts, which were rumoured last week after the company’s chief technology officer resigned, will at first mostly affect customer support and recruiting teams, the company said in a filing. It added that it expected to incur a $20 illion (€18.5 million) cost for severance payments.
The company said it would close about 40 per cent of its 450 “Greenlight Hubs”, facilities where the company’s drivers are given assistance in signing up to the app and other related needs.
It did not provide any additional guidance on the extent to which the pandemic had hit its business, other than to reiterate that rides were down “significantly”. “And with our hiring freeze,” Mr Khosrowshahi said in the memo, “there simply isn’t enough work for recruiters.”
In mid-March, as major cities were entering lockdown, Mr Khosrowshahi told investors and analysts that bookings for cars were down as much as 70 per cent in some early-hit markets such as Seattle. Uber is expected to report its first-quarter earnings after the markets close on Thursday.
Before the pandemic, Uber told investors it expected to record one profitable quarter by the end of this year, before adjusting for interest, taxes, depreciation and amortisation. It has since withdrawn its guidance for the year, but has not yet updated on its profitable quarter target.
Last year, the company removed 800 posts in its marketing, engineering and product teams over the course of two separate redundancy rounds in July and September.
Other recent cost-cutting measures include the shutting of its Uber Eats businesses in seven markets – Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay and Ukraine – announced on Monday. As part of the plans, Uber said it would transfer its Eats business in the UAE to its Middle East-focused subsidiary, Careem, where about 30 per cent of jobs will also be cut. – Copyright The Financial Times Limited 2020