Uber said Wednesday it will shed nearly 15 percent of its workforce as the coronavirus pandemic ravages its business.
The cuts will see the struggling ride-hail giant lay off 3,700 of its nearly 27,000 employees and will cost the company $20 million in severance and other related termination benefits. The cuts will mainly hit its customer support and recruiting teams, according to the filing with the Securities and Exchange Commission.
“With people taking fewer trips, the unfortunate reality is that there isn’t enough work for many of our front-line customer support employees,” an Uber spokesperson said in a Wednesday statement. “Since we don’t know how long a recovery will take, we are taking steps to bring our costs in line with the size of our business today.”
Chief Executive Dara Khosrowshahi for the remainder of the year will forgo his base salary, which was $1 million in 2019. Most of Khosrowshahi’s compensation, however, comes in the form of stock awards.
Uber’s ride-hailing business is down more than 80 percent in recent weeks as tens of millions around the world are locked indoors.
“This was a tough decision, but it is the right one to help protect the company’s long-term health and ensure we come out of this crisis stronger,” the Uber spokesperson added.
The San Francisco-based company earlier this month scrapped its 2020 financial guidance, saying it was “impossible to predict with precision” the impact that the coronavirus will have on its business.
Khosrowshahi last month said that the company had plenty of cash to ride out the coronavirus storm, saying that even in a worst-case scenario where the company’s rides business plummeted for the rest of the year, Uber would still have $4 billion in cash.
“We are very fortunate to have a strong cash position with about $10 billion of unrestricted cash as of end of February,” Khosrowshahi said. “In any crisis, liquidity is key.”
Uber in 2019 handed out more than 1,000 pink slips as it trimmed down Uber Eats as well as its marketing and engineering teams.
“Days like today are tough for us all,” Khosrowshahi said at the time, adding that he and his executive team “will do everything we can to make certain that we won’t need or have another day like this ahead of us.”