Washington (United States) (AFP) – Ride-hailing giant Uber will be laying off around 10 percent of its staff as part of “significant organizational changes,” CEO Dara Khosrowshahi said in a message to employees released on Wednesday. “Today, we’re making a number of significant organizational changes across Uber,” Khosrowshahi stated. “As a result, we will be reducing the size of our team by about 10 percent.”
Uber has a total of roughly 34,000 employees with operations in more than 70 countries, according to a recent SEC filing. The company said the layoffs were aimed at making the platform “simpler and faster” and at reducing coordination delays in what has become a sprawling operation. “A leaner organization will mean clearer ownership, faster decisions, and more time spent building rather than coordinating,” the message explained.
Founded in 2009, Uber remade the urban transportation sector by disrupting markets dominated by taxi and private car companies, allowing people to use their own vehicles to give others rides. The company has since expanded massively, including into the delivery sector, particularly for food and retail items. It also offers courier services over short distances.
Uber drivers are compensated at varying rates in different countries, and many have complained of not receiving adequate compensation for their work and the use of their vehicles. Almost none of Uber’s drivers are classified as full-time employees, with most treated as independent contractors, depending on local laws.
Khosrowshahi’s message focused on how the changes were aimed at operational efficiencies, but the company has also shut down services entirely in some countries. On Wednesday, Uber said it was shutting down its business in Nigeria and Uganda, after leaving Tanzania earlier this year.
In a note, Wedbush Securities said it expected Uber to save around $1.75 billion with the layoffs, which it would invest into growth areas. “Uber is aiming to create a leaner organization with fewer managerial layers and move faster in investing into growth,” Wedbush explained. It added that the managerial changes were aimed at cutting smaller teams within Uber and reducing employees sitting more than seven layers from the CEO.
One key area of reorganization was Uber’s delivery business, which Khosrowshahi said would see restaurant, retail, and direct delivery units consolidated into teams disaggregated at the global, regional, and country level. He also stated that the company would be concentrating jobs in key hubs, with global teams mainly in New York and San Francisco. His note indicated that only around one percent of employees would be allowed to work remotely going forward.
US-listed shares of Uber were up over 2.5% in midday trading.
© 2024 AFP
