Uber informed staff on Monday that it is cutting another 3,000 employees as it continues to grapple with the pressure from the global pandemic on its core business.
The news comes less than two weeks after Uber announced layoffs impacting 3,700 full-time roles. Taken together, the job cuts represent a roughly 25% reduction in the company’s headcount since the start of the pandemic.
In an email to staffers on Monday, which was viewed by CNN Business, Uber (UBER) CEO Dara Khosrowshahi said the company is also “closing or consolidating” around 45 office locations around the world.
“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,” wrote Khosrowshahi, adding that the cuts are aimed at helping the company “re-focus our efforts on our core.”
Shares of Uber were up more than 6% in midday trading Monday following the layoff news.
Lyft, Uber’s chief rival in the US, also announced layoffs last month. The two companies, which had a history of losing money before the pandemic, have experienced steep declines in their ride-hailing businesses as more people stay home. On an earnings call earlier this month, Khosrowshahi said Uber’s Rides business was down about 80% in the month of April, but added it has been picking up in recent weeks.
Unlike Lyft, Uber has spent years building up a food delivery business. “If there is one silver lining regarding this crisis, it’s that Eats has become an even more important resource for people at home and for restaurants.” But he cautioned that “while Eats growth is accelerating, the business today doesn’t come close to covering our expenses.”
Even as it makes painful costs cuts, Uber appears to be ready to invest more in meal deliveries. Last week, multiple outlets reported that Uber has made an offer to buy meal delivery company GrubHub. An Uber spokesperson previously told CNN Business the company does not comment on merger and acquisition rumors or speculation.
At the same time, Uber is tweaking how its ride-hailing business will operate during the health crisis. As parts of the US begin to reopen for business, Uber is now requiring drivers and riders to wear masks or face coverings as it anticipates a ramp up in ride requests.
“Having learned my own personal lesson about the unpredictability of the world from the punch-in-the-gut called Covid-19, I will not make any claims with absolute certainty regarding our future,” Khosrowshahi wrote in the email concerning the layoffs. “I will tell you, however, that we are making really, really hard choices now, so that we can say our goodbyes, have as much clarity as we can, move forward, and start to build again with confidence.”
