Lyft to Cut at Least 1,200 Jobs in New Round of Layoffs to Reduce Costs
Latest reductions could affect 30% of company’s over 4,000 employees
By Preetika Rana, Lauren Thomas and Emily Glazer
Wall Street Journal
Updated April 21, 2023 5:07 pm ET
Lyft Inc. plans to cut 1,200 or more jobs in a new round of layoffs as the ride-sharing company aims to reduce costs, according to people familiar with its p.
The latest cuts could affect 30% or more of Lyft’s more than 4,000 employees, the people said, and the company had planned to announce the move after a board meeting next week. The cuts could help Lyft reduce 50% of its costs, some of the people said. Lyft doesn’t count its drivers as employees.
The move comes days after a new chief executive officer officially took control and follows an earlier round of cuts that shed about 700 people late last year.
In a note to staff after The Wall Street Journal reported the cuts Friday, Lyft’s new CEO, David Risher, said, “We need to bring our costs down to deliver affordable rides, compelling earnings for drivers, and profitable growth.” Those things “require us to reduce our size and restructure how we’re organized,” he said.
The memo didn’t specify the size of cuts, saying the company planned to share more with employees next week.
“I own this decision, and understand that it comes at an enormous cost,” he added.
Lyft has struggled to keep up with its larger rival, Uber Technologies Inc., which gained market share and drivers during the pandemic. Lyft decided not to diversify outside transportation and limited its business to North America, while Uber’s food-delivery business and global operations gave it a boost.
Lyft was slower to roll out bonuses and new features to entice drivers during a yearslong labor shortage as the U.S. reopened following pandemic lockdowns.
The company’s stock has slid 69% over the past 12 months, while the tech-heavy Nasdaq Composite has fallen around 8%. Uber shares have declined around 3% over the same period.
Lyft shares rose around 6% on Friday after the Journal’s report that the company plans to reduce staff.
Lyft reported record revenue for the fourth quarter, but investors have been worried about its prospects. Its shares fell more than 35% after it announced those results in February because they included a weaker-than-expected revenue outlook for the three months through March. Lyft is scheduled to announce results for the March quarter on May 4.
Late in March, after months of pushback from some employees and investors, Lyft’s co-founders—Logan Green and John Zimmer—stepped back from managing the company. The pair hired Mr. Risher as the new CEO.
Mr. Risher, who served on Lyft’s board and formally took charge April 17, said in a recent interview that he saw building back employee morale as his priority. He spoke about reinventing the way the company treats its customers and drivers.
Lyft’s additional cuts come as many tech companies have been reducing their head counts. Globally more than 170,000 people have lost their jobs at tech companies this year, according to data from Layoffs.fyi, a website that tracks media reports and company releases.
In recent months, many tech leaders have spoken about overhiring during better times over the past two years. Lyft is one of the few to announce several rounds of layoffs. Facebook parent Meta Platforms Inc. said in March that it was cutting 10,000 jobs over the coming months after shedding 11,000 employees late last year, collectively affecting about a quarter of its staff.
Meta Chief Executive Mark Zuckerberg told employees Thursday that he wouldn’t rule out future layoffs.
Lyft had considered cutting more staff than it did late last year, according to people familiar with its plans, but the company’s co-founders settled on shedding the roughly 700 jobs in November. Those layoffs followed months of cost-cutting at the company.
In July, Lyft laid off 60 people—or under 2% of its workforce—and scaled back on businesses such as renting cars to customers. Last May, it said it planned to slow hiring and reduce the budgets of some of its departments.
Lyft to Cut at Least 1,200 Jobs in New Round of Layoffs to Reduce Costs - WSJ |
