Uber to Cut 350 Jobs—Its Third Layoff in Just Three Months
Under pressure to rein in its huge losses, Uber has cut 350 jobs—its third round of job cuts in just three months.
CEO Dara Khosrowshahi told employees in an email on Monday that the changes are part of a restructuring that’s aiming to “ensure the right people” are in the “right roles”—a similar explanation he’s given for the previous two cuts.
“Days like today are tough for us all, and the [executive leadership team] and I will do everything we can to make certain that we won’t need or have another day like this ahead of us,” he said.
The job cuts impact Uber’s self-driving unit, food delivery service, marketing, recruiting, and its core ride-hailing business.
In June, Uber said it had nearly 27,000 employees.
The latest round of layoffs also coincides with increasing pressure by investors on Uber to reduce its massive losses. The company has reported billion-dollar deficits since its initial public offering in May. During its second quarter, the company said it lost $5.24 billion, which included one-time costs associated with the IPO.
The company is scheduled to report its third quarter earnings on Nov. 4.
“This is another indicator of the pressure Uber is getting around cost cutting and reducing its strategic initiatives,” said Dan Ives, analyst at Wedbush Securities. “Dara and his team have their hands full as clearly Uber’s near-term growth is not supporting this bloated cost structure.
“It’s a troubling sign for a company that continues to stumble since their IPO.”
Since that IPO, Uber’s stock has dropped 30% to $31.44.
That decline, coupled with the recent string of layoffs, is a huge reversal for the company. Once a tech darling, it has since become a cautionary tale as investors rethink their appetite for plowing their money into money-losing tech firms.
Ives said this likely isn’t the last round of layoffs for Uber, which still has a lot of work to do to improve its financials. But Tom White, analyst for D.A. Davidson, said that the layoffs affecting the marketing division may actually be a positive sign. It could be a sign of tempering U.S. competition or that Uber has already achieved a high level of domestic consumer awareness.
It “sounds like this is final step of three-phases of layoffs this year,” he said.
Uber has been trying to remarket itself as “the operating system for your everyday life.” Last month, the company hosted an event in which it touted the integration of Uber Eats, bikes and scooters, public transportation, and its core ride-hailing app. It also boasted its Uber Freight business, which will soon have its own Chicago headquarters.
A couple of weeks ago, Uber also debuted its Uber Works app to match gig workers with temporary jobs—odd timing, given that the company is currently fighting a California bill that may reclassify some its drivers as full-time employees. And earlier this week, Uber announced plans to acquire a majority stake in Cornershop, an online grocery provider in Chile, Mexico, Peru and Toronto. Uber’s leadership had previously suggested that the company was considering getting into the grocery delivery service business.
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