Uber Technologies has announced plans to reduce global staff count this year while cutting costs, with 200 recruitment employees being laid off as part of the plan. The layoffs reportedly impact 35% of their recruiting team, less than one percent of total worldwide employment (32700 people worldwide). Uber CEO Dara Khosrowshahi recently pledged to reduce expenses while tightening performance reviews of recruiters.
These reductions should not have an adverse impact on operations and ridership, but will allow the company to focus on producing better results in the future. They hope to generate gross bookings between $33 and $34 billion and adjusted EBITDA between $800 million and $850 million by Q2 2023; additionally they hope to expand customer bases and strengthen their position among leading ride-hailing companies in the industry.
Uber has also taken steps to increase profitability by concentrating on its core operations, according to The Wall Street Journal. They have already implemented cost-cutting measures, such as cutting employee salaries and travel costs while decreasing driver compensation rates and strengthening diversity and inclusion efforts within their workplace.
However, despite these efforts, the company is still failing to turn a profit and facing various legal issues that threaten its growth.
As Uber faces competition from Lyft, which has been cutting its workforce as it attempts to recover from losses, Lyft CEO David Risher has already reduced 17% of total staff and laid off 6,700 workers through two separate rounds of layoffs this year.
As tech companies experience financial struggles such as lower advertising revenue and fears of recession in the US, numerous tech firms have made layoffs – this includes Reddit, Disney, Dell, 3M Affirm Amazon and IBM to name just a few. Reuters reports that Uber employs more than 32,000 employees worldwide; however, drivers do not count as employees of the company. Despite these challenges, however, Uber remains confident it can reach operating income profitability this year; although this will require making tough decisions such as cutting jobs in its freight division and food delivery business located outside the U.S. – with some recent layoffs having been reported by The Wall Street Journal.