Uber disarray: thousands of employees laid off

A terrifying situation is being experienced by thousands of Uber employees, as the company was forced to make massive layoffs as a result of the economic crisis that is leaving the coronavirus.

The company’s CEO, Dara Khosrowshahi in an email to staff, reported the bad news for workers.

The cost-cutting means Uber will have to shed 3,000 employees who will be laid off.

“We have to take these difficult actions to stand on our own two feet, to secure our future and continue our mission,” Khosrowshahi said in the email.

The Uber CEO further took the opportunity to state that the company plans to reduce investments in several “non-core projects.”

The move is complementary to an even tougher one made a few weeks ago after Uber laid off 3,700 employees, or 14 percent of its global workforce. In total, the company has eliminated about a quarter of its workforce in less than a month.

Uber will also close 45 offices worldwide and reorganize some of its divisions, Khosrowshahi said, to “refocus our efforts on our core,” which he defines as “helping people move and deliver things.”

Shares in Uber rose 8% to $35.27 on the news.

In a separate regulatory filing, the mobility company said Monday, May 18, that the layoffs and restructuring measures are expected to generate $1 billion in annual savings compared to pre-pandemic estimates.

Khosrowshahi also said the company would close its Singapore office over the next 12 months and move to a new “hub” in the Asia-Pacific region.

Perhaps the one big winner with all these bad times for COVID-19 is Uber Eats, as the food delivery service has seen a 54% increase in bookings.

“I will caution that while Eats’ growth is accelerating, today’s business doesn’t come close to covering our expenses,” Khosrowshahi said. “I firmly believe that the moves we are making will drive Eats to profitability, just as we did with Rides, but it’s not going to happen overnight,” he concluded.