Shortly after launching a new package delivery service in Uganda, Uber has decided to lay off 3,000 employees in the latest round of COVID-19-inspired cost-cutting. The news was announced in an email to staff by the company CEO Dara Khosrowshahi. The ride-hailing company has seen an 80 percent drop in its ride-hailing business as a result of the coronavirus pandemic. Khosrowshahi said in the email.
“We have to take these hard actions to stand strong on our own two feet, to secure our future, and to continue on our mission.”
Early this month, Uber laid off 3,700 employees, or 14 percent of its global workforce. In total, the company has eliminated around a quarter of its staff in less than a month.
That not all, Uber will also close 45 offices globally. And it will reshuffle some of its divisions, Khosrowshahi said, to “re-focus our efforts on our core,” which he defines as “helping people move, and delivering things.”
All its tech incubator and AI labs that it launched that September have also closed. Uber will also “pursue strategic alternatives for Uber Works,” its work shift-finder app. And Zhenya Lindgardt, the company’s vice president of customer engagement and business strategy, will be leaving the company, Khosrowshahi said.
Not all news is bad, as Uber Eats, the company’s food delivery serviced, has soared while much of the world is in lockdown. Last week, the company reported that bookings in its Uber Eats division were up more than 54 percent year over year. But Khosrowshahi notes those gains won’t cover the severe losses brought by the drop in ride-hailing, Uber’s core business.
Uber isn’t abandoning all of its cost-intensive side businesses. The company’s Advanced Technologies Group, which oversees its self-driving car program, will remain operational — although some ATG employees are being laid off. Last week, Khosrowshahi said Uber’s pursuit of self-driving cars “has always been a long-term investment.”
Khosrowshahi said he hoped the worst was behind them. He said;
Having learned my own personal lesson about the unpredictability of the world from the punch-in-the-gut called COVID-19, I will not make any claims with absolute certainty regarding our future. I will tell you, however, that we are making really, really hard choices now, so that we can say our goodbyes, have as much clarity as we can, move forward, and start to build again with confidence.
