Uber Technologies Inc., reeling from an ongoing slump in ride sharing business due to the COVID-19 pandemic, announced plans to slash another 3,000 jobs on top of the massive 3,700 jobs reduction announced earlier this month.
Uber officials announced the cuts in an internal memo sent to employees, citing the impact of the coronavirus on ridership demand, while noting that the company hoped to return to profitability within a few quarters.
“Given the dramatic impact of the pandemic, and the unpredictable nature of any eventual recovery, we are concentrating our efforts on our core mobility and delivery platforms and resizing our company to match the realities of our business,” Dara Khosrowshahi, CEO of Uber said in a statement provided by the company. “That’s led us to some painful decisions today: we are stopping some of our non-core investments and reducing the size of our workforce by around 3,000 people, each of whom I want to personally thank for their contributions to Uber.”
He said the company was making these hard choices now, so the company could move forward and build with confidence.
The company will close a total of 40 offices, out of several hundred offices worldwide. The largest closing is Uber’s Pier 70 office in San Francisco, which will be merged into its new San Francisco campus in the Mission Bay district.
The new cuts, when combined with the prior job reductions announced on May 6, will result in a total headcount reduction of about 25%. The company is providing significant benefits for the affected employees, with a minimum of 10 weeks pay, health benefits until the end of 2020, additional equity vesting, outplacement support and additional support for visa holders.
Uber previously noted that its April ride sharing business was down 80%, however it expects some of that business to rebound, noting that its Hong Kong business has largely recovered.
The company expects today’s actions, plus the earlier reductions and its recently announced deal to lead a $170 million investment into electric scooter and bike rental firm Lime, will save $1 billion per year.
Andrew McDonald, senior vice president of global rides will be in charge of the company’s new “Mobility” team, which will include Uber Transit. Pierre Dimitri Gore-Coty, vice president, Uber Eats, will be in charge of the company’s “Delivery” team, which includes Uber Eats, its recently announced Uber Direct and expansion into grocery delivery.