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Uber will lay off 3,700 workers worldwide – 14% of its staff – as lockdowns devastate rider numbers

Uber will lay off thousands of staff worldwide as the ride-hailing company is decimated by coronavirus stay-at-home orders. 

The business has been devastated by the pandemic and a company filing on Wednesday revealed around 3,700 roles will be cut from its global workforce – roughly 14% of its 26,900 employees. 

The cuts will be made among customer support and recruiting teams, meaning  driver number will be largely unaffected.

The ride-hailing app has been hit hard by the pandemic and a company filing on Wednesday revealed around 3,700 roles will be cut from its global workforce – around 14% of its 26,900 employees. CEO Dara Khosrowshahi, above, will also forgo his base salary for the rest of the year

Uber Technologies Inc also said in the filing that CEO Dara Khosrowshahi, 50, will forgo his base salary for the remainder of the year.

The Iranian-American businessman is worth an estimated $200million. He made $1 million in base salary last year but earned the majority of his compensation from bonuses and stock awards, CNBC reported.  

The company expects to incur about $20 million in costs for severance and related charges, the filing revealed. 

At the end of April it was reported that the business’ global gross bookings from ride hailing were down 80% from a year ago, according to The Information. 

The news site also reported that Khosrowshahi said if Uber did experience an 80% drop in rides for the rest of the year, the business would still have $4 billion in cash left over. 

But a memo sent to staff on Wednesday saw Khosrowshahi hint that more cuts may be on the way. 

He said: ‘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.

‘And with our hiring freeze, ‘ Khosrowshahi added, ‘there simply isn’t enough work for recruiters.”

Uber and rival ride-saving business Lyft have already withdrawn their full-year financial outlooks as demand for app-based rides dropped sharply across the world. 

But Uber, which operates in more markets around the world than Lyft, could recover some lost revenue with its food delivery business.

On Monday, Uber’s Middle East business Careem said it was cutting 536 jobs this week, representing 31% of the Dubai-headquartered company’s workforce.

Uber shares opened 3% lower on Wednesday. 

A staff memo from 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.'

A staff memo from 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.’

The news of job cuts comes just a day after California Attorney General Xavier Becerra, along with three state city attorneys, announced plans to sue Uber and Lyft.

The suit, filed in San Francisco Superior Court, alleges both firms denied staff key benefits and protections by classifying drivers as contractors rather than employees.  

At the time, City Attorney Dennis Herrera said: ‘Uber and Lyft claim that properly classifying drivers as employees is incompatible with flexibility. That is a lie.

‘There is no legal reason why Uber and Lyft can’t have a vast pool of employees who decide for themselves when and where they work – exactly as drivers do now. These companies simply don’t want to do it.’

Uber said it expects to incur about $20 million in costs for severance and related charges in light of the coronavirus pandemic

Uber said it expects to incur about $20 million in costs for severance and related charges in light of the coronavirus pandemic 

The suit alleges the firms denied workers the right to minimum wage and overtime pay, reimbursement for business-related expenses, access to unemployment and disability insurance as well as paid sick leave.

In response to the lawsuit an Uber spokesperson told CNBC: ‘At a time when California’s economy is in crisis with four million people out of work, we need to make it easier, not harder, for people to quickly start earning. We will contest this action in court, while at the same time pushing to including with guaranteed minimum earnings and new benefits.’

Lyft said: ‘We are looking forward to working with the Attorney General and mayors across the state to bring all the benefits of California’s innovation economy to as many workers as possible, especially during this time when the creation of good jobs with access to affordable healthcare and other benefits is more important than ever.’ 

Read more at DailyMail.co.uk


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