In an SEC filing dating back to last week, Uber disclosed plans to layoff 3,700 employees. The figure amounts to around 14% percent of the ride hailing giant’s total workforce.
In the document, the company states that the job loss is part of a planned reduction in operating expenses “in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the company’s business.”
While Uber hasn’t suspended operations altogether, the company has no doubt taken a massive hit to its bottom line as state governments have issued stay at home orders for non-essential workers.
In a letter to staff, CEO Dara Khosrowshahi noted that the cuts will come from community operations and recruiting. Uber will also be closing around 40 percent of its Greenlight locations — used for in-person driver assistance.
“With the reality of our rides trips volumes being down significantly, our need for CommOps as well as in-person support is down substantially,” he writes. “And with our hiring freeze, there simply isn’t enough work for recruiters.”
Khosrowshahi has also agreed to waive his own base salary for the rest of 2020.
“In connection with the foregoing, Dara Khosrowshahi, the Company’s Chief Executive Officer, after consultation with the Board of Directors, agreed to waive his base salary for the remainder of the year ending December 31, 2020,” the company writes in the filing. “In connection with this decision, Mr. Khosrowshahi and the Company entered into a letter agreement, effective as of May 2, 2020.”
The executive made around $1 million in 2019.
Airbnb is to cut 25 per cent of its workforce and scale back its efforts to lure high-end travellers as it seeks to stem its coronavirus-related losses.
Brian Chesky, chief executive, told staff on Tuesday that 1,900 of the accommodation booking company’s 7,500 workers would be dismissed as soon as next week.
The company is forecasting its revenue for 2020 to be less than half of what it took in last year, according to a letter sent to staff. Airbnb said it would pause its efforts to integrate transportation options into its app, as well as the development of Airbnb Studios, an in-house unit to produce travel-related content. It also said it would scale back its investments in Hotels and Lux, its service aimed at high-end rentals.
“Travel in this new world will look different, and we need to evolve Airbnb accordingly,” Mr Chesky told employees. “People will want options that are closer to home, safer, and more affordable. But people will also yearn for something that feels like it’s been taken away from them — human connection.”
The company did not say how much it expected to save as a result of the cuts, which will affect the Airbnb workforce globally. The moves announced on Tuesday are in addition to an estimated $800m in savings from ceasing all of its marketing, a move the company confirmed last month. Airbnb raised $2bn in funding last month, valuing the company at $18bn, a steep drop from its $31bn price at the time of its previous funding round in 2017.
Reference: TechCrunch and Financial Times.
