Lyft Announces Plans to Cut 1,072 Jobs in Cost-Cutting Strategy
Ride-hailing company Lyft has announced plans to cut 1,072 jobs, which equates to 26% of its workforce. The move follows a previous round of layoffs in November 2022, in which 13% of staff were cut. The latest round of layoffs is part of a larger cost-cutting strategy announced by CEO David Risher, who became the new leader of Lyft after former CEO Logan Green was replaced. The downsizing is intended to streamline the company’s operations and refocus it on its drivers and passengers. Lyft aims to become a “faster, flatter company where everyone is closer to our riders and drivers,” Risher said. The cuts are expected to carry severance and benefits costs of up to $47 million in Q2 2023, but the savings will be used to invest in competitive pricing, faster pick-up times, and better driver earnings. More details will be announced during the company’s earnings call on May 4th.
The layoffs are part of a wider trend of job cuts in the tech industry, with major companies including Meta, Amazon, McDonald’s, and Disney also making cutbacks. Meta, formerly known as Facebook, announced plans to lay off 10,000 workers in its “year of efficiency” after already cutting 11,000 jobs in fall 2022. Dropbox, the data storage company, also announced that it would lay off 500 employees, or 16% of its staff.
Lyft’s shares closed up around 1.5% on Thursday, and the company has around 4,000 employees. The layoffs are expected to affect at least 1,200 workers, accounting for over 30% of the company’s workforce. According to sources familiar with the matter, the cuts could help Lyft slash 50% of its costs. The company plans to put the savings expected from the restructuring toward “continued service-level improvements benefitting riders and drivers.”
During the pandemic, Uber experienced a surge in its food delivery business, while Lyft fell behind its bigger competitor. Lyft does not offer such a service. Lyft’s co-founders, Logan Green and John Zimmer, stepped down from their management positions earlier this month. David Risher, an Amazon veteran, took over as CEO on April 17th.
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