Uber reveals 3,700 layoffs a day ahead of its first-quarter earnings report

Uber will lay off 3,700 workers, it revealed in a Securities and Exchange Commission filing Wednesday. The cuts represent nearly 15% of Uber’s workforce of 26,900 employees, and will affect customer support and recruiting teams.

The news breaks the day before Uber is set to report first-quarter earnings. The San Francisco-based ride-hail app’s demand has plunged during the coronavirus pandemic, as social distancing and stay-home mandates made its transportation services—which require close contact with others—moot. Recently Second Measure, an analytics firm that aggregated debit and credit card purchases from millions of U.S. consumers, found spending on Uber rides was down 83% in March.

In addition to the layoffs, Uber CEO Dara Khosrowshahi will waive his salary for the rest of the year. The company said the terminations will likely cost the company $20 million in severance pay and benefits, and that more “difficult adjustments” would come in the next two weeks.

(May 14, 2020), Uber and fellow ride-hail app Lyft were sued by the state of California over their classification of drivers as contractors rather than employees, which it argued deprived drivers of rights such as sick leave pay and unemployment insurance—two issues spotlighted by the pandemic.

On Monday, it was reported that Uber is in talks to acquire electric scooter-share company Lime at a steeply discounted valuation.