Uber to lay off 14% of its staff

Uber (UBER) is laying off thousands of staffers as the ongoing pandemic continues to impact its business. The company said in a filing Wednesday that it is cutting about 3,700 full-time roles, or roughly 14% of its staff, on its customer support and recruiting teams in response to the reduced volume of ride requests and the company’s hiring freeze. Uber also said in the filing that CEO Dara Khosrowshahi will waive his base salary for the rest of 2020. “Days like this are brutal. I am truly sorry that we are doing this, just as I know that we have to do this,” Khosrowshahi wrote in an email about the layoffs to staffers, which was viewed by CNN Business. Khosrowshahi also hinted that there may be more changes to come. “As I said at yesterday’s All Hands, this is one part of a broader exercise to make the difficult adjustments to our cost structure (team size and office footprint) so that it matches the reality of our business (our bookings, revenue and margins),” he wrote. “We are looking at many scenarios and at each and every cost, both variable and fixed, across the company.” Daniel Ives, an analyst who tracks Uber for Wedbush, called the layoffs a “necessary move” for the company. “On the other side of this dark valley, the Uber business model will likely look a lot different for the next few years (at least) and the company must rationalize costs and a smaller operation to focus on attaining profitability in this ‘new normal’ backdrop.” Last week, rival Lyft (LYFT) said it would be cutting 1,000 staffers and furloughing hundreds more as it also grapples with the impact of the ongoing pandemic on people using its ride-hailing services. With reduced demand for rides as many people stay home during the pandemic, Uber, which is behind meal delivery service Uber Eats, had been encouraging drivers to toggle between its ride-hailing and delivery services. Uber’s Rides business made up the bulk of its adjusted net revenue in the fourth quarter of 2019, or 81%; its food delivery service, Eats, made up 11%. Both companies have a history of steep losses and went through layoffs prior to the pandemic. Lyft and Uber are scheduled to report earnings results this week. Shares of Uber were down nearly 4% in early trading Wednesday.