Uber: We're cutting another 3,000 employees over coronavirus struggles

Uber Eats is booming but it's nowhere big enough to make up for plummeting rides.
Written by Liam Tung, Contributing Writer

Just two weeks after laying off 3,700 employees, Uber is now cutting its worldwide headcount by a further 3,000 people as the ride-hailing firm navigates the coronavirus pandemic

The Wall Street Journal reports that Uber's latest job cuts will also involve closing 45 offices. The cuts affect Uber employees across the globe. The company is closing its Pier 70 office in San Francisco and will begin winding down its Singapore office to move to a new Asia-Pacific hub. 

Uber laid off 3,700 employees two weeks ago or about 14% of its workforce. The company's trip volumes have plummeted under stay-at-home orders in place across the US, Europe, and Asia since March.  

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During the pandemic Uber has shifted its focus towards Uber Eats, which saw gross bookings grow 54% year over year to $4.6bn thanks to a surge in demand for food delivery. However, its main ride-hailing business saw a decline of 3% to $10.9bn. 

In an email to employees seen by CBS News, Uber CEO Dara Khosrowshahi said its rides business was down 80% compared with last April. 

"We began 2020 on an accelerated path to total company profitability," he wrote. "Then the coronavirus hit us with a once-in-a-generation public health and economic crisis. People are rightfully staying home and our rides business, our main profit generator, is down around 80%."

Uber said in an SEC filing it expects the latest round of job cuts and office closures to cost it between $110m and $140m in severance payments, while site closures will cost it between $65m and $80m. The combined layoffs and office closures aim to save the company $1bn in costs. 

Khosrowshahi said in a statement that the company is now focusing on its core mobility and delivery platforms. 

"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," said Khosrowshahi. 

"We are stopping some of our non-core investments and reducing the size of our workforce by around 3,000 people."

SEE: Uber's future may be more about Uber Eats, Uber Freight than ride sharing

Khosrowshahi warned employees that while Uber Eats is growing it is not the answer to the company's future. Uber Eats today "doesn't come close to covering our expenses", he said. 

"I have every belief that the moves we are making will get Eats to profitability, just as we did with Rides, but it's not going to happen overnight."

As part of the cuts, Uber has also decided to wind down its Incubator and AI Labs while it's pursuing alternatives for Uber Works.  

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