6:54 pm, May 18, 2020
Uber has cut 3,000 jobs from its business in the second wave of cuts in a fortnight in efforts to save £820m annually.
The ride-hailing giant will be closing or consolidating 45 offices globally, and almost all departments will be affected by layoffs.
Chief executive Dara Khosrowshahi said Uber will be refocusing on its core business, moving people and delivering food, in a message to staff today.
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.’
In the note he said the rides business, Uber’s main profit generator, fell a staggering 80 per cent.
He added: ‘Ultimately, I realised that hoping the world would return to normal within any predictable timeframe, so we could pick up where we left off on our path to profitability, was not a viable option.
‘This is a decision I struggled with.’
The San Francisco company has cut a quarter of its workforce since the start of the year, after eliminating 3,700 people from the payroll earlier this month.
£2.4bn
amount Uber lost in the first quarter
Uber lost £2.4bn in the first quarter as the pandemic hit its overseas investments.
Lyft, Uber’s main US rival, laid off 982 people last month, or 17 per cent of its workforce because of plummeting demand. Careem, Uber’s subsidiary in the Middle East, cut its workforce by 31 per cent.
Uber estimates it will incur £143m to £180m in charges related to the restructuring, including severance, other benefits and office closing costs, according to a federal filing.
Combined with the earlier layoffs, the changes are designed to save £820m annually.
One silver lining is that Uber’s Eats business has become more popular with people staying home.
‘We no longer need to look far for the next enormous growth opportunity: we are sitting right on top of one,’ he added.
He cautioned, however, that the growth in Eats does not come close to covering expenses.
He added: ‘I have every belief that the moves we are making will get Eats to profitability, just as we did with Rides, but it’s not going to happen overnight.’
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