Uber is laying off 3,700 employees, which is 14% of its 26,900 employees, to tide over the coronavirus crisis. The layoffs are in the customers support and recruiting teams. The company will incur approximately $20 million for severance and termination benefits. The company made this announcement just ahead of its Q1 2020 earnings call. Uber CEO Dara Khosrowshahi has waived his base salary for the rest of 2020.
In an internal memo (made public by CNBC) to employees, Khosrowshahi hinted at further cost cuts. “This is one part of a broader exercise to make the difficult adjustments to our cost structure (team size and office footprint) so that it matches the reality of our business (our bookings, revenue and margins).” He added that:
“We are looking at many scenarios and at each and every cost, both variable and fixed, across the company. We want to be smart, to move fast, to retain as many of our great people as we can, and treat everyone with dignity, support and respect. As I said yesterday, you can expect we will have a further, final update for you within the next two weeks.” — Dara Khosrowshahi
Cab aggregators’ operations came to a grinding halt worldwide, as lockdowns and shelter-in-place orders kicked in. The pandemic has crushed the travel industry and has suspended virtually all outdoors’ activities. Uber’s gross bookings have fallen 80% YoY globally, Yahoo Money reported on April 21.
In India, within the first 21-day lockdown, Uber began accepting rides for essential activities in 8 cities, including to and from hospitals, pharmacies, and grocery stores. The company had begun the service in Gurgaon. Starting May 4, cab aggregators have been permitted to restart operations in orange and green zones, with a maximum of two passengers (and the driver) at a time. However, different states have implemented stricter policies at their levels, even within Orange and Red Zones.