In brief: Uber says its global bookings are down 80 percent compared to the period before countries asked people to stay indoors. As a result, the company is laying off thousands of employees to cut down their operational costs, and will offer them "generous" severance packages and a longer period of healthcare coverage.
In a filing with the Securities and Exchange Commission earlier today, Uber announced it will lay off 3,700 employees, which is about 14 percent of its total workforce around the world. Additionally, the company will permanently close no less than 180 driver service centers, and this looks like it's just the beginning of a series of measures that Uber will make in the coming months in order to stay afloat.
The job cuts are from the support and recruiting teams, and the company will maintain its freeze on hiring as it tries to assess the impact of a significant drop in ridership during the last two months. For example, drivers used to have 450 "greenlight hubs" where they could sign up and get in-person support, but now those will be limited to only 270.
In an internal memo revealed by CNBC, CEO Dara Khosrowshahi noted that "days like this are brutal," and explained that the company "worked hard to put together generous severance packages with a longer period of healthcare coverage to help provide a bridge, and we are also supporting EXTs whose roles are affected by today’s decision."
Khosrowshahi will waive his base salary for the rest of the year, and said Uber will give employees "a further, final update" within the next two weeks. The CEO made $1 million in base salary in 2019, as well as additional compensation in the form of stock awards and a $2 million bonus.
In related news, Uber is reportedly planning to use some of its $10 billion pile of cash to lead an emergency investment fund in scooter startup Lime. The move would reduce the latter company's valuation just enough to make it worth buying sometime later.