Uber will eliminate 3,700 jobs and permanently close 180 driver service centers, the first in a series of cost-cutting measures to be announced in the next two weeks as a response to the coronavirus pandemic.
In the document, the company states that the job loss is part of a planned reduction in operating expenses “in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the company’s business.”
In a letter to staff, CEO Dara Khosrowshahi noted that the cuts would come from community operations and recruiting. Uber will also be closing around 40 percent of its Greenlight locations used for in-person driver assistance. “With the reality of our rides trips volumes being down significantly, our need for Comm Ops as well as in-person support is down substantially,” he writes. “And with our hiring freeze, there simply isn’t enough work for recruiters.”
Khosrowshahi has also agreed to waive his base salary for the rest of 2020. “In connection with the foregoing, Dara Khosrowshahi, the Company’s Chief Executive Officer, after consultation with the Board of Directors, agreed to waive his base salary for the remainder of the year ending December 31, 2020,” the company writes in the filing. “In connection with this decision, Mr. Khosrowshahi and the Company entered into a letter agreement, effective as of May 2, 2020.”
The reductions will affect 14% of staff around the world. California demanded Uber and Lyft Tuesday for allegedly flouting a state law designed to give gig-economy workers the benefits of employees. If the case is successful, the companies could be on the hook for substantial new costs that further jeopardize their business models. For more Business news click here.