In less than 2 weeks of announcing 3700 job cuts, Uber has decided to let go off an additional 3,000 from its workforce. The news came in first via Wall Street Journal. This brings a total reduction of about 25% in Uber’s workforce. The announcement came in through a email that CEO Dara Khosrowshahi sent to his staff today.
The multinational mobility service has suffered a massive 80% drop in ride bookings amid the coronavirus outbreak. Uber has also made the tough decision of closing down 40% of its greenlight locations along with 45 offices.
Khosrowshahi made it clear that the company can no longer rely on new capital or investors and will have to move towards establishing themselves as “a self-sustaining enterprise” in order to keep growing, expanding and innovating. According to a SEC filing, Uber will end up paying $145M in severance packages and another $80Mn to shut offices globally.
One of Uber’s major rivals, Lyft has also had to let go off close to 1,000 employees very recently, which comes up to almost 17% of the company’s workforce.
Interestingly, on the contrary, the food delivery demands for Uber have spiked upto 52% relative to the first quarter last year due to the pandemic. Statistically, the gross bookings have been at a whopping 4.68 billion USD for Uber Eats. Uber is also in advanced stage talks to acquire GrubHub, in order to provide further boost to a rather fledgling food delivery business.
Khosrowshahi however cautioned, mentioned how the acceleration in the food arena, though notable, “doesn’t come close to covering (our) expenses.” Despite the plummet, Uber would still end with 4 billion USD in unrestricted cash with an additional 2 billion USD in revolving credit.
Khosrowshahi has also declared his agreement to not take a salary for the remainder of the year, after discussions with the Board of Directors, effective as of May 2, 2020.
The pandemic has taken a toll on the global economy. A significant fraction of the financial aftermath has been witnessed by ride hailing businesses, the most paramount of all being Uber.
