Ride-hailing giant Uber recently said that it has decided to lay off 3,000 more employees as coronavirus-led restrictions has reduced the demand for ride-hailing services.
These job cuts are in addition to the 3,700 Uber had announced earlier this month. The employees were informed about the decision by Chief Executive Officer Dara Khosrowshahi in an internal email.
The company, which was earlier in talks with its UberEats rival GrubHub Inc, has now said it plans to reduce investments in several non-core projects.
About two-thirds of Uber’s revenue comes from the United States and Canada, where lockdowns were issued in the middle of March. The company said that trip requests had plummeted 80% globally in April but were recovering slowly.
According to a US SEC filing, the company estimates that it will incur approximately $175million to $220million of charges. These estimated costs include approximately $110million to $140million related to severance and other termination benefits (excluding stock-based compensation expense), and up to approximately $65million to $80million related to site closures, including approximately $25million to $30million for write-offs of the leasehold improvements related to site closures. These charges are primarily cash-based, and the majority are expected to be recognized in the second quarter of 2020.
The company had previously announced plans to reduce its customer support and recruiting teams by approximately 3,700 full-time employee roles. In connection with these actions, the company estimates that it will incur approximately $35million to $40million of charges related to severance and other termination benefits (excluding stock-based compensation expense).
Most of the 3,700 employees laid off earlier were informed about their termination over a Zoom call which lasted for just about three minutes.
In a statement, Uber CEO Dara Khosrowshahi said, “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. 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.”
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