Uber has announced it will cut 3,000 more jobs, close or consolidate 45 global offices, and reduce its investments in several “non-core” projects as it deals with what chief executive Dara Khosrowshahi described as the “damn virus”.
The lay-offs are in addition to the 3,700 job losses announced earlier this month. Since the coronavirus crisis took hold, the ride-sharing giant has planned cuts of more than a quarter of its global workforce.
The company said in a filing it expected this would mean an annual saving of $1bn. Uber’s share price rose by more than 8 per cent on the news.
“You’ve heard me say it before: hope is not a strategy,” Mr Khosrowshahi wrote in an email to staff on Monday, seen by the FT.
“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 this damn virus out . . . I wanted there to be a different answer.”
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. Uber’s Eats food business still operates at a heavy loss despite 50 per cent year-on-year growth in the first quarter as communities started going into lockdown. “The business today doesn’t come close to covering our expenses,” Mr Khosrowshahi said in his email, but described Eats as the company’s next “enormous growth opportunity”.
The company is in talks to acquire rival food delivery platform Grubhub, though any potential deal has already piqued the interest of regulators concerned about competition.
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.