Uber sacks 3,700 staff due to effects of COVID-19

Multinational ride-hailing company, Uber, has sacked at least 3,700 staff members which amount to around 14 per cent of the company's global workforce.

Uber is set to cut cost “in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the company’s business.”.

Although the decision does not affect contract drivers, Uber will also be closing around 40 per cent of its Greenlight locations — used for in-person driver assistance, according to TechCrunch.

Uber's chief executive, Dara Khosrowshahi, would also waive his base salary for the remainder of the year.

In a letter to the company's staff, Khosrowshahi noted that the cuts will come from community operations and recruiting.

The move comes a day ahead of Uber’s earnings report and follows a 17 per cent staff cut by its US rival Lyft.

“With the reality of our rides trips volumes being down significantly, our need for CommOps as well as in-person support is down substantially,” he writes. “And with our hiring freeze, there simply isn’t enough work for recruiters.”

“Today’s cost-cutting move ahead of tomorrow’s earnings is a painful, but unfortunately a necessary, move for Dara & co. to make in this unprecedented COVID-19 environment,” said Daniel Ives at Wedbush Securities.

“On the other side of this dark valley, the Uber business model will likely look a lot different for the next few years (at least) and the company must rationalize costs and a smaller operation to focus on attaining profitability in this ‘new normal’ backdrop.”

TechCrunch/AFP