Uber cuts another 3,000 jobs; CEO Khosrowshahi says firm to focus on core services

Cab aggregator Uber has laid off another 3,000 employees as the financial stress of the coronavirus increases on the firm's accounts. In another round of cuts, the firm has also closed as many as 45 regional offices globally.

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Another round of job cuts 

The third round of job cuts means that the firm has laid off 7,000 employees from a total workforce of 22,000 employees. However, this cut does not include drivers since they are not considered employees of the firm.

Ride-hailing companies were already struggling to demonstrate a path to profitability well before the pandemic began and with increased uncertainty whether the companies that rely on sharing backseats and living rooms will survive after the pandemic is over.

Uber will be re-focusing on its core business, moving people and delivering food and groceries, said CEO Dara Khosrowshahi, in a note to employees Monday.

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The ride-hailing giant will be closing or consolidating 45 offices globally, and almost all departments will be affected by layoffs. The company is closing its business for developing products and services for its platform and a unit working on artificial intelligence. It will also pursue strategic alternatives for its job recruiting app, Uber Works, Khosrowshahi said.

“This is a decision I struggled with,” Khosrowshahi said. “Our balance sheet is strong, Eats is doing great, Rides looks a little better, maybe we can wait this d*mn virus out .... I wanted there to be a different answer ... but there simply was no good news to hear.”

Uber’s rides business, the company’s main profit generator, fell 80% in April compared to the same month last year.

“Ultimately, I realized that hoping the world would return to normal within any predictable time frame, so we could pick up where we left off on our path to profitability, was not a viable option,” he said.

Uber lost $2.9 billion in the first quarter as the coronavirus pandemic decimated its overseas investments. Companies that rely on the sharing economy have been hit hard by the coronavirus pandemic, as people stay indoors and shy away from shared services to reduce the virus’ spread.

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Uber CEO forgoes salary

Last Thursday, Uber reported that the company has recorded nearly $3 billion net loss. The ride-sharing platform's CEO Dara Khosrowshahi announced that he would forgo his salary for the remaining period of this financial year.

The Uber CEO had last month reportedly called a meeting of the executives in charge to tell them they needed to plan cost cuts. As per reports, the executives responded saying that they are willing to let go of a share from their own pay if it meant they could save at least some jobs, to which, Khosrowshahi said that layoffs would be the best way forward. 

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