On Tuesday, it was Airbnb Inc. announcing layoffs. Now it appears Uber has done the same, indicating in a company filing on Wednesday morning that it will cut 3,700 of its 26,900 employees or about 14% of its workforce.
"On May 6, 2020, Uber Technologies, Inc. (the "Company") announced plans to reduce its operating expenses in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the Company's 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. In connection with these actions, the Company estimates that it will incur approximately $20 million related to severance and other termination benefits. The Company is evaluating other cost and will provide an update in subsequent SEC disclosures regarding such amounts, if material," the filing states.
Uber's stock plunged nearly 4% Wednesday morning.
A recent report from The Information suggests lockdowns have sent global bookings of the ride-sharing company down at least 80%. These are similar numbers to the collapse in Airbnb bookings since mid-March.
Khosrowshahi told employees in a memo on Wednesday:
"We are looking at many scenarios and at each and every cost, both variable and fixed, across the company," Khosrowshahi said. "We want to be smart, to move fast, to retain as many of our great people as we can, and treat everyone with dignity, support and respect."
Full memo below (via CNBC):
I wanted to let you know that we just announced the elimination of around 3,700 roles in CommOps and Recruiting, and the closure of 40% of our Greenlight locations. You can read the emails that were sent to those teams here.
With the reality of our Rides trips volumes being down significantly, our need for CommOps as well as in-person support is down substantially. And with our hiring freeze, there simply isn't enough work for recruiters.
This is not in any way a reflection of these employees' efforts or contributions to getting us to where we are, as a service that everyone associates with movement and earnings opportunities. We wouldn't be here without their efforts and I want to personally thank them for everything they've done for Uber.
We have worked hard to put together generous severance packages with a longer period of healthcare coverage to help provide a bridge, and we are also supporting EXTs whose roles are affected by today’s decision.
That's today's news. But, 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). We are looking at many scenarios and at each and every cost, both variable and fixed, across the company. We want to be smart, to move fast, to retain as many of our great people as we can, and treat everyone with dignity, support and respect. As I said yesterday, you can expect we will have a further, final update for you within the next two weeks.
Days like this are brutal. I am truly sorry that we are doing this, just as I know that we have to do this. And while it’s easier said than done, we have to keep our heads down and keep executing, because that—and nothing less—is what will keep Uber going and get us to the other side.
Given this news, and since we have Q1'20 earnings tomorrow, I thought it would be good to get everyone together again on Friday for a Global All Hands, where we can walk through our financial results and today's changes, and can continue to answer your questions as openly as possible. Keep an eye out for an invite soon.
And just like that, gig-economy companies are struggling to survive in virus lockdowns that now risk ushering in a depression.