Uber Technologies Inc said on Monday that it would cut an additional 3,000 jobs as coronavirus-led restrictions sap demand for ride-hailing services. Uber had already cut 3,700 jobs earlier this month as ride-hailing trips, which generate the bulk of Uber’s revenue, dropped 80 per cent globally in April.
Uber Technologies Inc will concentrate on its core businesses in ride-hailing and food delivery and cut 23 per cent of its workforce in an attempt to become profitable despite the coronavirus pandemic, Chief Executive Officer Dara Khosrowshahi said in an email to employees on Monday.
In a regulatory filing on Monday, Uber said the layoffs and restructuring measures will result in one-time, mostly cash-based charges between $210 million and $260 million in the second quarter. Overall, the measures are expected to generate $1 billion in annual cost savings compared with pre-pandemic budget plans.
The ride hailing company, Uber employed 28,600 people before the pandemic, according to a regulatory filing at the end of the first quarter. The company’s initial wave of 3,700 layoffs was targeted at customer support and recruiting teams, while Monday’s announcement would affect 3,000 employees across departments.
Meanwhile, Uber is reportedly in talks with GrubHub Inc to reinforce its food delivery business even as Mr Khosrowshahi praised Uber Eats as a silver lining during the crisis.
As part of the restructuring plans, Uber is also closing its startup incubator program and artificial intelligence research lab. It is also looking at strategic alternatives for Uber Works, a platform that was launched in October to help companies fill staffing gaps with temporary workers during situations of peak demand.