Less than two weeks after, Uber said Monday that it’s letting go of 3,000 more staff members and closing or consolidating around 45 offices worldwide. The ride-hailing company has now reduced its workforce by 25%, making these layoffs one of the largest by a Silicon Valley company since the novel sent the world reeling.
The moves, which were reported earlier by The Wall Street Journal, are part of the company’s attempt to rein in costs and deal with the economic impacts of the pandemic. Company CEO Dara Khosrowshahi told staff in an email on Monday that Uber’s rides business, its main profit generator, is down by around 80% as much of the world shelters in place.
“Having learned my own personal lesson about the unpredictability of the world from the punch-in-the-gut called COVID-19, I will not make any claims with absolute certainty regarding our future,” Khosrowshahi wrote in the email. “I will tell you, however, that we are making really, really hard choices now, so that we can say our goodbyes, have as much clarity as we can, move forward, and start to build again with confidence.”
The coronavirus has shaken the entire economy over the past couple of months with most companies seeing an impact on their business. But the travel and tourism industry has experienced an especially precipitous drop as people around the world have mostly stayed home. Along with Uber, Lyft and Airbnb have also instituted mass layoffs. Lyftof its workforce last month and earlier in May.
This is Uber’s second round of layoffs this month. In the first week of May, the company, mostly from its customer support and recruiting teams. It had also let go of in three rounds of cuts last fall. The company said Monday’s layoffs will affect most of its departments and regions around the world.
Along with cutting jobs, Uber is also shuttering offices and winding down some of its side projects. It’s closing roughly 45 offices worldwide, including its prominent Pier 70 office in San Francisco where it worked on projects like self-driving cars and flying vehicles. The company said Pier 70’s staff and projects will folded into Uber’s Mission Bay campus, which is yet to open.
Uber said it’s also closing down its AI Labs project, along with its product incubator. And it’s looking for “strategic alternatives” to its.
The idea is for the company to focus explicitly on its rides and food delivery businesses. With that, it also made management changes. Uber promoted Andrew Macdonald, who was head of global rides, to lead “mobility,” and Pierre-Dimitri Gore-Coty, who was head of Uber Eats, to lead “delivery.”
Khosrowshahi said in the email Monday that the silver lining amid the outbreak has been the growth of Uber Eats. But, he added, the expansion of its food and grocery delivery business doesn’t come close to covering the company’s expenses and still isn’t profitable.
Khosrowshahi wrote to his staff that he’s never had a harder day professionally and thanked them for their work.
“You’ve heard me say it before: hope is not a strategy. 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 wrote.
“Ultimately, I realized that hoping the world would return to normal within any predictable timeframe, so we could pick up where we left off on our path to profitability, was not a viable option.”