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In brief: Just like many other companies, Uber announced more layoffs in an effort to keep its global operations afloat. The company will survive, but only after letting go of 3,000 more people that will now have to make do with severance packages while looking for a new employer.
Uber is laying off 3,000 employees less that two weeks after an initial round of 3,700 to keep costs down after seeing ridership drop significantly due to lockdown measures around the globe.
At the time, CEO Dara Khosrowshahi hinted that more cost-cutting measures would follow in the near future, but he didn't go into any specific details as to what they might be. Today, Khosrowshahi sent a letter to Uber employees in which he explained that the company will need to let go of more people and close down 45 offices around the world.
Back in March, Khosrowshahi told investors the company was sitting on a $10 billion pile of unrestricted cash and that it would weather the storm just fine. Now that narrative has changed, and the company has effectively slashed 25 percent of its workforce. In addition to that, it will tone down its product incubator and revisit deliveries in an effort to keep drivers busy.
Ridership is up slightly and Uber Eats saw a 54 percent year-over-year increase in the volume of deliveries, but in the end the company was hit hard, just like Lyft and Airbnb, both of which have also had to resort to layoffs.
Khosrowshahi expressed his regret for being too hopeful. "I wanted there to be a different answer," he said in the email to employees. "Let me talk to a few more CEOs...maybe one of them will tell me some good news, but there simply was no good news to hear. Ultimately, I realized that hoping the world would return to normal within any predictable timeframe, so we could pick up where we left off on our path to profitability, was not a viable option."