Uber revealed it will cut 3,700 full-time positions due to the financial impact of the Covid-19 pandemic in a Securities and Exchange Commission filing, one day before it reports its first-quarter earnings, while the company’s CEO Dara Khosrowshahi will waive his base salary for the rest of the year.
The ride-hailing company said that the job cuts will affect its full-time customer support and recruiting teams in a bid to cut some of its operating expenses but the layoffs will cost Uber around $20 million in “severance and other termination benefits”.
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“Due to lower trip volumes in its Rides segment and the Company’s current hiring freeze, the Company is reducing its customer support and recruiting teams by approximately 3,700 full-time employee roles,” Uber said in its filing.
“Days like this are brutal,” Khosrowshahi said in an email sent to all Uber employees. “I am truly sorry that we are doing this, just as I know that we have to do this.”
Uber’s CEO Dara Khosrowshahi
The move follows that of rival Lyft, which last week laid off 982 employees, 17 percent of the company’s staff, and cut the base salaries of its top executives.
Unsurprisingly the slowdown from the coronavirus outbreak gravely affected the income of drivers, which are hired as contractors by the two ride-hailing companies.
California sued both Uber and Lyft, accusing the two companies of classifying their drivers improperly as contractors under a new state law instead of employees, evading workplace protections, and denying their workers key benefits.
