Uber confirmed Monday that it will cut 3,000 more jobs while closing dozens of offices and scaling back money-losing bets in order to slow steep revenue losses incurred due to the coronavirus pandemic.
Monday’s announcement by CEO Dara Khosrowshahi follows a media report over the weekend that more layoffs were imminent.
Coupled with earlier cuts in May, the total of laid-off employees now stands at 6,700.
In an email to staff first reported by the Wall Street Journal, Khosrowshahi said the uptick in Uber Eats orders amid shelter-in-place rules throughout much of the world just isn’t enough to make up for the heavy losses in the rides business.
“You’ve heard me say it before: hope is not a strategy,” Mr Khosrowshahi wrote in an email to staff on Monday.
“While that’s easy to say, the truth is that this is a decision I struggled with. Our balance sheet is strong, Eats is doing great, Rides looks a little better, maybe we can wait for this damn virus out . . . I wanted there to be a different answer.
“As a leadership team, we had to take the time to make the right decisions, to ensure that we are treating our people well, and to make certain that we could walk you through our decision making in the sort of detailed and transparent manner you deserve,” the email read.
“Given the dramatic impact of the pandemic, and the unpredictable nature of any eventual recovery, we are concentrating our efforts on our core mobility and delivery platforms and resizing our company to match the realities of our business,” the company said in a statement.
“That’s led us to some painful decisions today: we are stopping some of our non-core investments and reducing the size of our workforce by around 3,000 people, each of whom I want to personally thank for their contributions to Uber. As I said to our teams today, we are making these hard choices now so that we can move forward and begin to build again with confidence.”
He reiterated the impact of Covid-19 on its ride-share business, with journeys down 80 per cent globally.
“We’re seeing some signs of a recovery,” Mr Khosrowshahi said. “But it comes off of a deep hole, with limited visibility as to its speed and shape.”
As part of the move, the company said it would find “strategic alternatives” for its Uber Works division, which matched people with temporary jobs, launched just only last October.
It said it would wind down its Incubator and AI Labs units as well. Instead, it will focus on mobility and delivery sectors.
The office closures include one of its locations in San Francisco, and the winding down of its Singapore office in favour of a new Asia-Pacific hub, in a location to be determined.
Following the lead of Airbnb, which announced a 25 per cent workforce reduction earlier this month, Uber said it would create a talent directory for employees leaving the company as well as severance packages.
Uber’s stock price was up more than 8% over Friday’s close following the weekend report and subsequent confirmation as investors cheered the further cost reductions.
