Uber to cut nearly 7,000 employees as firm seeks to consolidate core activities
Ride-hailing firm Uber will cut nearly 7,000 employees, its chief executive Dara Khosrowshahi said in an email to employees, in a bid to remain profitable during the coronavirus crisis.
In total, Uber will cut 6,700 staff – 23 per cent of its workforce – up from the 3,700 redundancies announced earlier this month.
The firm will also reduce its investments in “non-core activities” and focus on its ride-hailing and food delivery services, the email said.
According to a regulatory filings, the job cuts will result in one-off charges of up to $260m in the second quarter.
However, the measures are expected to save up to $1bn in costs compared with pre-coronavirus budgeting.
The cuts will fall across the business, with customer support and recruiting expected to bear the brunt.
Before the crisis began, Uber was expected to become profitable on an earnings basis, but the collapse in ride-hailing demand has stalled the forecasts.
At the height of lockdown measures in April, ride-hailing demand dropped 80 per cent, according to the company.
On 7 May, the firm said it would instead aim to become profitable at some point in 2021, pointing to the growth in food delivery service Uber Eats as a major growth opportunity.
In his email to staff, Khosrowshahi said the service had been the firm’s silver lining during the crisis, with demand increasing 50 per cent in the first quarter.
In order to expand its share of the food delivery market, Uber is in talks over the acquisition of rival Grubhub.