Combined with earlier cuts of 3,700 employees this month, the latest layoff means Uber has trimmed its workforce by 25 percent since the coronavirus outbreak. It says rides have been down 80 percent and have only just begun to recover.
Uber has made up for some of that lost business with a surge in its food delivery service, Uber Eats, but the business hasn’t been enough to keep the struggling app afloat.
“I wanted there to be a different answer,” Uber CEO Dara Khosrowshahi wrote in an email to employees, which was shared by the company. “Ultimately, I realized that hoping the world would return to normal within any predictable time frame, so we could pick up where we left off on our path to profitability, was not a viable option.”
For Uber, the layoffs were the latest blow to a business under pressure to cut costs and improve efficiency after going public last year, in a late spring stock market listing. The initial public offering was followed by three rounds of layoffs, internal belt tightening and escalating prices as consumers saw heavily subsidized trip discounts disappear.
The coronavirus has put pressure on the company to cut back on experimental projects and unproven businesses in areas such as self-driving and micromobility, which represented longer investments with little immediate upside for the company’s bottom line.
Khosrowshahi announced Uber would reorganize certain teams around its core businesses: giving rides and making deliveries.
Tech companies based on the so-called sharing economy, including Uber, Lyft and Airbnb, have taken a hit amid the novel coronavirus outbreak as consumers have opted to heed shelter-in-place orders. That means consumers also have been less likely to share rides with strangers, ride in private vehicles or lodge in homes and apartments listed by independent hosts.
Uber’s layoffs follow similar cuts at rival Lyft, which announced a 17 percent reduction in its workforce in April. Airbnb laid off 1,900 employees earlier this month.