Lyft tightens its belt, laying off 17% of its workforce
This is Lyft’s second round of layoffs this year.
Angela Lang / CNET
Lyft significantly reduces its number of employees. The hail fighting company revealed in a regulatory filing Around 982 employees will be laid off on Wednesday, or 17% of the workforce.
Lyft said the layoffs were part of its effort to lower operating costs and adjust cash flow due to the “ongoing economic challenges that this will pose.” the COVID-19 pandemic and its impact on the company’s business. “
The belt is tightened because Lyft has restricted its business due to the novel outbreak of the corona virus. It can be seen that the income from the ride hail dry up with that from the rental of bicycles and scooters. To diversify its range, Lyft a Range of new programsB. A pilot project to deliver medical care and test kits to seniors and other vulnerable groups. It is also working on a food delivery program and has partnered with Amazon to provide delivery drivers to the retail giant.
“It is now clear that the COVID-19 crisis will have a major economic impact that will affect our business,” said Logan Green, CEO of Lyft, in an emailed statement. “So we made the difficult decision to reduce the size of our team. Our guiding principle for decision-making right now is to ensure that we emerge from the crisis in the best possible position to accomplish the company’s mission.”
Uber also experienced a financial blow during the crisis. Speculation spread on Tuesday that she too was planning to lay off employees with a staff cut of around 20%, which would correspond to around 5,400 people, according to information The information.
When asked about possible cuts, an Uber spokesman told CNET, “As expected, the company is reviewing every possible scenario to ensure that we are in a stronger position than ever before on the other side of this crisis.”
In one regulatory filing Uber announced on Tuesday that its longtime chief technology officer, Thuan Pham, had resigned. Pham was one of the last remaining executives to rise under the leadership of former Uber CEO Travis Kalanick. In a statement, current Uber CEO Dara Khosrowshahi said: “As the head of our engineering organization, Thuan has made important contributions over the past seven years that have helped make Uber the global technology platform it is today.”
Since Uber and Lyft became listed companies a year ago, both executives and board members have resigned. The companies also fired employees before the coronavirus emptied the city streets. Uber has let go of more than 1,000 employees in three cuts and Lyft around 90 people quit in January.
On Wednesday, Lyft announced that in addition to letting go of employees, approximately 288 people were employed for a period of 12 weeks. Temporary wage cuts also begin. The reduced pay is 30% for managers, 20% for Vice Presidents and 10% for all other employees. Lyft Board members have also volunteered to waive 30% of their cash compensation for the second quarter of this year.
Both Lyft and Uber are expected to hold profit talks with investors next week.
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