Global ride hailing company Uber has announced that it will be laying off approximately 3,700 full-time employees as the company plans to reduce its operating expenses in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic.
Uber also announced that its CEO Dara Khosrowshahi will be forgoing his base salary for the remainder of the year ending December 31, 2020.
“With people taking fewer trips, the unfortunate reality is that there isn’t enough work for many of our front-line customer support employees. Since we don’t know how long a recovery will take, we are taking steps to bring our costs in line with the size of our business today. This was a tough decision, but it is the right one to help protect the company’s long-term health and ensure we come out of this crisis stronger,” an Uber spokesperson said.
In a regulatory statement, Uber said that it is reducing its customer support and recruiting teams due to lower trip volumes in its Rides segment
“In connection with these actions, the Company estimates that it will incur approximately $20 million related to severance and other termination benefits,” Uber added.
While Uber has not officially commented on how India operations will be impacted, Entrackr reported that Uber will be letting go of around 700 employees. India business too, has been impacted majorly with a nationwide lockdown being in place since March 24.
The layoff will be impacting nearly 30% of Uber’s total workforce in the country. Currently Uber is able to resume operations in some cities in India, as the central government has allowed usage of cabs in orange and green zones.
In response to TNM’s queries on the layoffs, Uber said, "We are aware of our obligations under government guidelines issued during the lockdown.’’
In an email to its employees, CEO Dara said that with the reality of its trip volumes being down significantly, Uber’s need for the community operations and in-person support is down substantially. And with its hiring freeze, he said that there isnt enough work for recruiters.
“This is not in any way a reflection of these employees’ efforts or contribution to getting us to where we are, as a service that everyone associates with movement and earning opportunities,” he wrote.
He said that this is one part of a broader exercise to make the adjustments to its cost structure in terms of team size and office footprint so that it matched the reality of the business (bookings, revenue and margins).