Uber will lose about a quarter of its employees

Uber Technologies Inc. additionally, cuts several thousand jobs, close more than three dozen offices and restructuring in various fields, ranging from cargo transportation and ending with self-driving technology, trying to kompensirovat losses from coronavirus pandemic.

Chapter Uber Dara Khosrowshahi announced future reductions in the email to employees on Monday, less than two weeks after the company said it will eliminate 3,700 jobs and plans to save more than $ 1 billion of fixed costs. Adopted on Monday the decision to close the 45 offices and lay off about 3,000 people means that in less than a month Uber will lose about a quarter of its employees. Drivers are not classified as employees, so they are not included.

Home quarantine has had a devastating effect on the company’s main business, taxi accounted for three quarters of the incomes of the Uber to the start of the pandemic. Compared to the April period a year ago, the number fell by 80%.

In a letter to employees Khosrowshahi noted that some signs of recovery, but the losses are great, and when and how fast the business will recover is unknown. The division of the company for the delivery of food, Uber Eats, was the only bright spot during the crisis, but, as noted in the company, this business is at the moment not able to cover the costs.

According to media reports, Uber is in talks to buy competing company Grubhub Inc. According to people familiar with the situation, the transaction will help to avoid losses from the costly business of building operations to deliver and give Uber a competitive advantage with an industry leader DoorDash Inc. Dara Khosrowshahi did not mention potential deal in his letter.

investors ‘ Enthusiasm began to wane even before the pandemic. The Uber was one of the most anticipated debuts on the stock exchange a year ago, but the result was disappointing as Wall street is increasingly focused on the factor of profitability for Uber and other technology companies.

Dara Khosrowshahi appointed in 2017 after a series of scandals with the previous head of the company, fired more than 1,100 people last year. In February, before a pandemic has swept the domestic market, Khosrowshahi made a promise to make Uber profitable by the end of 2020, a year earlier than previously expected. He recently moved the deadline for the following year.

under the recent changes, Uber will be reducing non-core business. Mr. Khosrowshahi said that the company turns the business incubator, and the artificial intelligence lab, while also exploring “strategic alternatives” for Uber Works that bring together potential employers with the staff of the platform sector of the economy.

the Company also reassesses expensive types of business, such as transportation and Autonomous driving. In recent years, Uber has spent hundreds of millions of dollars on the development of self-driving cars.

Employees in the United States will suffer most from the cuts, according to a person familiar with the matter. Uber closes one of its offices in downtown San Francisco, which employs more than 500 employees. It also considers the issue of moving its Asian headquarters from Singapore.

a Competing service Lyft Inc. said last month that it would cut about 17% of its workforce and dismiss employees and cut wages amid efforts to reduce costs.

while these measures should help to reduce costs, before the Uber is a fundamental question: will clients as of quarantine to use the services of the core business of a taxi and if so, how the company guarantees its drivers and customers — what are they safe?

the Company has allocated $ 50 million for the purchase of means of protection for drivers, including masks, disinfectant sprays and wipes. Starting Monday, applieds Uber will ask drivers around the world confirm that they are wearing a mask selfie. Customers also must confirm that they are wearing a mask.

At the same time, for the Uber also have other problems. So, at the beginning of this month, California has filed a lawsuit against Uber and Lyft, accusing the company of misclassification of drivers as independent contractors, which deprives the rights of drivers, such as paid sick leave and insurance in case of unemployment — issues that became a priority during a pandemic. Entered into force on 1 January, the law aims to force companies to classify drivers as employees. Uber and Lyft say their drivers are properly categorized in accordance with the law.