Uber is laying off another 3,000 workers, the company announced in a filing with the Securities and Exchange Commission on Monday. That’s in addition to the 3,700 workers the company laid off earlier this month. Uber had 26,900 employees at the end of last year. Uber drivers, whom the company treats as independent contractors, are not directly affected.
“Given the dramatic impact of the pandemic, and the unpredictable nature of any eventual recovery, we are concentrating our efforts on our core mobility and delivery platforms and resizing our company to match the realities of our business,” CEO Dara Khosrowshahi said in the SEC filing. “That’s led us to some painful decisions today.”
Uber’s core ride-hailing business has been devastated by the coronavirus pandemic. The Wall Street Journal reports that Uber’s rides business was down 80 percent, year over year, in April.
The declining rides business has been offset somewhat by strong demand for Uber Eats. But in an email to employees obtained by the Journal, Khosrowshahi wrote that the Eats business “doesn’t come close to covering our expenses.”
Uber estimates that it will spend $110 million to $140 million on severance packages and another $65 million to $80 million on expenses related to shutting down offices. The Wall Street Journal says Uber is closing 45 office locations. The two rounds of cuts are designed to reduce Uber’s overhead by more than $1 billion.
Earlier this month, the company reported a first-quarter loss of almost $3 billion. More than $2 billion of that figure reflected write-downs of the value of Uber’s minority stake in other ride-hailing businesses around the world that have had their value fall due to the coronavirus. Ignoring those write-downs, Uber lost $1.1 billion—on par with losses in previous quarters.
Earlier this year, Uber was aiming to achieve profitability by the end of the year. Now that strategy is in tatters. And the company’s second-quarter results are likely to be even worse, since the coronavirus only began to affect the US economy in the last few weeks of the first quarter.