Uber is laying off approximately 3,300 employees, which accounts for about 10% of its workforce. This decision marks the largest reduction since the COVID-19 pandemic. Chief Executive Dara Khosrowshahi communicated the layoffs in a letter to employees on Wednesday. The layoffs come as Uber faces increasing competition from the robotaxi industry and delivery services such as Instacart and DoorDash.
Waymo, an autonomous taxi company owned by Alphabet, announced it received approval from California regulators to expand its service area across 18 counties, including San Diego and Sacramento. Waymo operates in 14 cities, including Los Angeles, San Diego, and San Francisco, and competes with Uber and Lyft nationwide.
Khosrowshahi stated in his letter, "We are removing layers, simplifying team structures, refining our global location strategy, and focusing our people and investments against the biggest opportunities ahead of us. This wasn’t a decision we made lightly." The company aims to streamline its workforce to enhance decision-making and clarify ownership.
As of its most recent annual report, Uber employed roughly 34,000 workers in over 70 countries. Bloomberg reported that the layoffs will reduce Uber's headcount to below 30,000.
In addition to the layoffs, Uber announced a new feature for teen accounts that allows parents to view a live video of their child’s ride. Khosrowshahi noted that Uber has been spending too much time coordinating between teams and not enough on business development, leading to a reduction in roles focused on coordination and a 50% cut in teams with just one or two employees.
Khosrowshahi remarked, "The outcome is a simpler org chart geared toward building versus managing." Furthermore, Uber is requesting most remote employees to return to the office, reducing the number of fully remote employees to around 1%. The company will continue to enforce its hybrid work policy, which requires employees to be in the office three days a week.
Amazon's robotaxi company, Zoox, is set to launch paid rides in Las Vegas after receiving a commercial exemption from the National Highway Traffic Safety Administration for its purpose-built robotaxis.
Uber shares rose more than 2% to approximately $77 in midday trading on Wednesday. The company's stock has fallen around 6% this year, while the Nasdaq Composite Index has increased by more than 12%.
Traditional ride-hailing services may face challenges from the rise of robotaxis, which developers claim are safer and more efficient. Zoox, which utilizes a vehicle without a steering wheel or gas pedal, began charging for its first paid rides in Las Vegas last month and is also testing in San Francisco and has a presence in 10 other cities, including San Diego and Miami.
Last month, Uber and Lyft drivers in California made progress toward unionizing, with the budding union securing support from 30% of active drivers in the state. The union could be certified in less than 30 days if no other qualifying organization emerges.