Lyft is significantly cutting back its staff. The ride-hailing company revealed in a regulatory filing Wednesday that it’s terminating about 982 employees, which is 17% of its workforce.
Lyft said the layoffs are part of its efforts to reduce operating expenses and adjust cash flows because of “ongoing economic challenges resulting fromand its impact on the company’s business.”
The belt tightening comes as Lyft has seen its business curtailed by the novel coronavirus outbreak. It’s seen its ride-hailing revenue dry up, along with that from its bike and scooter rentals. In an effort to diversify its offerings, Lyft has rolled out a, such as a pilot for delivering medical supplies and test kits to senior citizens and other vulnerable populations. It’s also working on a meal delivery program and has partnered with Amazon to provide the retail giant with delivery drivers.
“It is now clear that the COVID-19 crisis is going to have broad-reaching implications for the economy, which impacts our business,” Lyft CEO Logan Green said in an emailed statement. “We have therefore made the difficult decision to reduce the size of our team. Our guiding principle for decision-making right now is to ensure we emerge from the crisis in the strongest possible position to achieve the company’s mission.”
Uber has also experienced a financial hit during the crisis. Speculation spread Tuesday that it too was planning employee layoffs with a reduction of about 20% of its staff, which would be about 5,400 people, according to The Information.
When asked about the possible cutbacks, an Uber spokesman told CNET, “As you would expect, the company is looking at every possible scenario to ensure we get to the other side of this crisis in a stronger position than ever.”
In a regulatory filing Tuesday, Uber said that its longtime chief technology officer, Thuan Pham, was resigning. Pham was one of the last remaining executives who rose up under former Uber CEO Travis Kalanick’s leadership. In a statement, current Uber CEO Dara Khosrowshahi said, “As the leader of our engineering organization for the last seven years, Thuan has made important contributions that have helped make Uber into the global technology platform it is today.”
Since becoming public companies a year ago, both Uber and Lyft have seen executives and board members step down. The companies also laid off staff even before the coronavirus emptied city streets. Uber hasin three rounds of cuts, and Lyft in January.
On Wednesday, Lyft said that along with letting go of staff it’s furloughing about 288 employees for a 12-week period. It’s also beginning temporary salary reductions. The reduced pay will be 30% for executives, 20% for vice presidents and 10% for all other workers. Members of Lyft’s board of directors have also volunteered to waive 30% of their cash compensation for the second quarter of this year.
Both Lyft and Uber are scheduled to have earnings calls with investors next week.