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Shares of Uber spiked as much as 8 percent Monday on reports that the ride-hail giant is axing an additional 3,000 employees and closing 45 offices as the coronavirus slams the brakes on its business. Combined with 3,700 pink slips the company handed out earlier this month, the latest cuts — which CEO Dara Khosrowshahi announced …
Shares of Uber spiked as much as 8 percent Monday on reports that the ride-hail giant is axing an additional 3,000 employees and closing 45 offices as the coronavirus slams the brakes on its business.
Combined with 3,700 pink slips the company handed out earlier this month, the latest cuts — which CEO Dara Khosrowshahi announced in a company-wide email — bring Uber’s coronavirus-fueled layoffs to about 25 percent of the company’s workforce.
“We’re seeing some signs of a recovery, but it comes off of a deep hole, with limited visibility as to its speed and shape,” Khosrowshahi said in his email, according to the Wall Street Journal. He added that the Uber Eats food delivery arm has been a bright spot during the pandemic, but “the business today doesn’t come close to covering our expenses.”
Khosrowshahi didn’t rule out more cuts for Uber, saying that it was impossible to make such a claim about Uber’s future with “absolute certainty.”
“I will tell you, however, that we are making really, really hard choices now, so that we can say our goodbyes, have as much clarity as we can, move forward, and start to build again with confidence.”
Shares of Uber were trading up 7.7 percent early Monday afternoon, at $34.96.
The offices being shuttered include one of Uber’s downtown San Francisco hubs, which was home to more than 500 employees.
Khosrowshahi also said that Uber, which has been struggling to turn a profit since going public last year, would be scaling back its artificial intelligence lab and product incubator, and would be re-evaluating costly endeavors like freight and self-driving vehicles, according to the report.
Khosrowshahi also reportedly vetoed a request from a number of Uber’s top engineers to cut their own salaries in order to avoid laying off members of their staffs.
“The answer is no,” Khosrowshahi said in response to the request, according to reports last week. “What we’re doing through is fundamentally realigning the company so that our cost base matches the new reality of the world post COVID. We do not want to take temporary measures.”
Khosrowshahi likewise signaled that part of his plan includes “remaking the engineering team so that over time more jobs would be located overseas,” according to the report.
News of Uber’s additional layoffs comes just days after the company reportedly entered acquisition talks with food delivery giant GrubHub. A $6 billion tie-up between the two companies would result in a behemoth that controls more than half of the delivery market nationwide.
A representative for Uber did not immediately respond to a request for comment.
