Uber to fire 200 employees in quest of profitability
A few months ago, Uber's CEO said the company was not considering firing anyone. The company changed its stance when it axed staffers from Uber Freight. Now, it has done it again. The firm announced its decision to fire 200 employees to streamline costs. This is Uber's second round of layoffs since it cut 6,700 jobs during the initial COVID wave.
Why does this story matter?
The post-pandemic economic slowdown is yet to give way. Companies are still figuring out how to navigate the troubled waters without much damage. Uber is one of them. The company is tightening its finances to lessen the blow of an expected recession. Once heavily invested in growth, Uber now cares about margins. The layoffs indicate a change in strategy.
Layoffs to affect 35% of the recruiting team
Uber is firing employees from its recruitment division. Around 35% of the team will be affected by the cuts. The reductions form less than 1% of Uber's 32,700-strong global workforce. Earlier this year, the company axed 150 staffers from its freight division. Uber did not specify whether there will be more job cuts, but one can't deny the possibility.
Uber plans to keep headcount flat this year
Earlier this year, Uber expressed confidence in achieving profitability by the end of this year. To reach that goal, the company decided to streamline its operations. The decision to cut employees from the recruiting division aligns with the firm's overall cost-cutting strategy. In May, it announced its plan to keep the headcount flat this year.
Company fired staffers twice this year
In December last year, Dara Khosrowshahi, the CEO of Uber, said the company is in a "good place" and is seeing "zero signs of weakness." It has fired employees twice since then. This indicates a change in Uber's approach. Previously, the company was focused on conservative hiring. Now, its goal is to proactively reduce the headcount to achieve operating profitability.
Uber rival Lyft has fired over 1,700 employees
Uber's decision to fire 200 employees is nothing compared to what its chief rival has been doing. Lyft, another ride-hailing giant, has fired over 1,700 employees. In April, it cut 1,072 jobs, or 26% of its workforce, to reduce costs. The April move followed the first round of layoffs that saw about 683 staffers, or 13% of its workforce, getting axed.
