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Uber Announces Huge Job Losses

Ride hailing app Uber has been forced to axe 3,000 employees as it attempts to save £820 million annually. 45 offices will be closed or merged globally in layoffs that impact almost all departments within the firm.

To the remaining staff Chief Executive Officer Dara Khosrowshahi commented on the job losses, which are the second wave of cuts in under two weeks, “Uber will be refocusing on its core business, moving people and delivering food.”

The message attempted to provide reassurance to those that remain. He said: ‘Our balance sheet is strong, Eats is doing great, Rides looks a little better, maybe we can wait this damn virus out.” “I wanted there to be a different answer… but there simply was no good news to hear.”

The move comes after private hire revenue dropped by 80 per cent due to lockdowns across the world. The CEO revealed that he was not in a position to sit and hope that normal trading levels would return in the near future. He added that reducing the workforce by 25% since the beginning of 2020 was a decision he struggled with.

3,700 people were let go earlier in May and upper cost estimates for implementing the restructuring is £180m.  The changes are designed to save £820m annually and come after Uber incurred losses of £2.4bn in the first quarter of the year.

Uber Eats, its food delivery business has benefitted from people staying home but according to Khosrowshahi the gains have not offset the lost revenue from the main activity of the business. In fact according to business’s leader this division remains someone off reaching profitability itself.

Uber is not the only struggling company in the taxi and private hire arena. Its major competitor in the USA, Lyft, has let nearly 1,000 people go (approximately 17% of its personnel) due to the impact of the crisis.