Uber (UBER -1.88%) is gearing up to layoff 3,700 full-time employees due to the damage caused by the COVID-19 pandemic.
With millions of people working and sheltering at home, the ride-hailing company has seen its core business plummet. That has prompted it to withdraw its financial targets for 2020 and sparked rumors it would engage in massive layoffs. Last week The Information reported Uber is experiencing an 80% decline in business during the pandemic and warned of impending layoffs.
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Some of that was confirmed in a Securities and Exchange Commission filing Wednesday in which Uber cited lower trip volumes amid the pandemic for the cost-cutting moves. Uber expects to have about $20 million in expenses for severance and other benefits due to the 3,700 being let go. The ride-hailing company said in the filing the headcount reductions will happen in its customer support and recruiting teams. Uber has more than 22,000 employees. Uber’s CEO Dara Khosrowshahi has also agreed to forgo his base salary for the rest of the year.
Uber joins rival Lyft (LYFT -6.70%), which announced last week it was reducing its workforce by 982 employees, amounting to 17% of its staff. It’s also furloughing 288 in an effort to cut expenses. Lyft is also slashing the base salaries by 30% for executives, 20% for vice presidents, and 10% for the remainder of its staff.
At the same time Uber is laying off workers, the tech stock is making plans to keep drivers and riders safe when operations resume again. To do that it will require all drivers in certain regions including the U.S. to wear masks and is developing technology to ensure they do so.
