Uber Spree : Laying Quarter of its employees in a month

Uber, while for years burned cash in exchange for user growth, had faced challenges even before corona-virus hit. Its food delivery operations, a bright spot in terms of adoption, loses money, and other bets like autonomous vehicles and air taxis have yet to be proven.

 

Uber Spree continues totaling for now 6700 around employees fired

Two weeks before ride-hailing app Uber laid off nearly 3,700 employees or about 14 per cent of its workforce via multiple Zoom calls and each call lasted less than three minutes, with a common message: “Today will be your last working day with Uber”, in a move to reduce operating expenses in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the company’s business.

The company manager said during the video conference : “Today will be your last working day with Uber,” as he informed some of the axed customer-support employees.

“Right now, the rides business is down by more than half due to COVID-19. The difficult and unfortunate reality is there is not enough work for many front-line customer-support employees,” Ruffin Chaveleau, head of Uber’s Phoenix Center of Excellence, told the employees.

Now as the spree continues, Uber is again laying off 3,000 employees in the latest round of COVID-19-inspired cost-cutting, CEO Dara Khosrowshahi said in an email to staff. This spree was inevitable as the ride-hailing company has seen an 80 percent drop in its ride-hailing business as a result of the coronavirus pandemic.

“We have to take these hard actions to stand strong on our own two feet, to secure our future, and to continue on our mission,” Khosrowshahi said in the email.

In addition to laying off thousands of employees, Uber will also close 45 offices globally. And it will reshuffle some of its divisions, Khosrowshahi said, to “re-focus our efforts on our core,” which he defines as “helping people move, and delivering things.”

As such, Uber is winding down its tech incubator and AI labs, which it launched last September. The company will also “pursue strategic alternatives for Uber Works,” its work shift-finder app. And Zhenya Lindgardt, the company’s vice president of customer engagement and business strategy, will be leaving the company, Khosrowshahi said.

But even as the company makes efforts to cut costs, Uber is in talks to acquire Grubhub Inc., a purchase that would make it the dominant player in the U.S. food delivery market. Khosrowshahi told employees Monday that although Uber loses money on food delivery, it was “the next enormous growth opportunity,” an opinion reinforced by surging demand for takeout during the lockdowns.

A tie-up with Grubhub could lead to significant savings in a highly competitive industry, but has raised antitrust concerns among lawmakers including Senator Amy Klobuchar.

On Monday, Uber also borrowed $100 million, adding to a $900 million bond sale it priced last week.