Lyft, the ridesharing company, is cutting approximately 26% of its workforce or 1,072 jobs as it seeks to reduce costs and improve its business operations. In addition, the company will also scale back hiring and eliminate 250 open positions. Although the decision will lead to severance and benefits costs of up to $47 million in the second quarter, Lyft believes that the savings will aid in improving services for drivers and passengers. More details about the decision will be provided during an earnings call scheduled for May 4th.
This recent move follows last year’s layoffs, which saw the company let go of 13% of its employees. The decision to downsize comes just weeks after co-founder Logan Green stepped down as CEO following a rough earnings call. Green stated that Lyft would need to increase spending to remain competitive with Uber. While neither Lyft nor Uber has turned a profit on an annual basis, Uber was profitable last quarter due to investments in other businesses.
Lyft’s new CEO, David Risher, who is a former Amazon executive and started this month, has called for streamlined business operations and a renewed focus on meeting the needs of riders and drivers. He is part of a broader executive shakeup that sees president and co-founder John Zimmer move to the board of directors, where Green still has a role.
While layoffs in the tech industry have been a common occurrence in 2023, many companies have had to make tough decisions due to the challenging global economy. However, Lyft’s rival, Uber, has so far avoided significant layoffs in recent months. Layoffs.fyi reported that Uber laid off about 60 engineers in Lithuania last fall and 150 Uber Freight workers in January. This does not guarantee that Uber will avoid similar decisions, but it suggests that the ride-hailing giant may not be under as much pressure as Lyft.
