ISLAMABAD: Uber Technologies Inc will eliminate 3,700 jobs and permanently close 180 driver service centres, the first in a series of cost-cutting measures to be announced in the next two weeks as a response to the coronavirus pandemic, Bloomberg reported.
Profit reached out to Uber Pakistan for comment, in response to which their Head of Communications Hyder Bilgrami said, “With people taking fewer trips, the unfortunate reality is that there isn’t enough work for many of our frontline customer support employees. 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. 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.”
According to a letter by Uber CEO Dara Khosrowshahi written to the company’s employees on Wednesday, these reductions will affect 14pc of staff around the world, mainly those in support and recruiting. Bloomberg also reported having received an email in which the CEO said that ridership is down significantly, and the company is maintaining a freeze on hiring.
Out of around 450 driver centres that Uber operates worldwide, 40pc will shut down. The locations, called Greenlight Hubs, are used to sign people up to drive for Uber, teach them how to use the app and address issues that arise on the job. In March, as the virus was spreading in North America, Uber said it was temporarily closing all hubs in the US and Canada.
Khosrowshahi signalled that more “difficult adjustments” would be put forth in the next two weeks. “Days like this are brutal,” he wrote.
This sort of painful day is becoming commonplace. Tech companies have eliminated more than 38,000 jobs in the past two months, according to Layoffs.fyi, which tracks the job market. Lyft Inc., the main alternative to Uber in North America, said last week it was dismissing 17pc of staff, furloughing more and reducing salaries. Their longtime peer in the sharing economy, Airbnb Inc., said Tuesday the company was cutting a quarter of its workforce.
The job losses are sudden for many, but at Uber, they may seem drawn out. After a disappointing initial public offering a year ago, Uber dismissed more than 1,000 employees over multiple rounds of cuts that extended from July to what Khosrowshahi described as a “last wave” in October. They were part of a drive toward profitability, which was expected to arrive by the end of this year.
Uber has seen its landscape shift considerably since then. It instituted a hiring freeze in March, withdrew its financial forecast and wrote down some $2 billion worth of investments in April and said Monday it would shutter food delivery operations in seven countries, writes Bloomberg.
Uber is scheduled to report first-quarter financial results Thursday.