San Francisco headquartered ride hailing startup Uber Technologies, hours away from its first quarter results announcement, said it will cut jobs of 3,700 full-time employees across divisions of customer support and recruitment, according to a filing with the US Securities and Exchange Commission (SEC) on Wednesday.
The layoffs are expected to reduce its operating expenses to cancel out the economic impact that the Covid-19 pandemic has induced on Uber’s business, with lower trip volumes in its rides segment.
“In connection with these actions, the company estimates that it will incur approximately $20 million related to severance and other termination benefits,” the 8K filing read. Additionally, CEO Dara Khosrowshahi’s base salary has been waived for the rest of the calendar year 2020.
Uber had already withdrawn its full-year financial outlook, mid-April.
The SoftBank-backed company’s India business plans to reportedly lay off about 500-700 employees, over the next two weeks. The company employs over 2,000 people in the country, according to an Entrackr report, citing unnamed sources.
Separately, TechCircle spotted at least 19 claims on social media, where university graduates who had previously secured technology-based roles with Uber in the United States, had their job offers rescinded due to the coronavirus’ impact on the company’s business.
While Uber declined to comment on the veracity of the India-based layoffs, an Uber India spokesperson said that the company is aware of its obligations under the central government’s guidelines during the lockdown, in response to TechCircle’s queries.
The San Francisco, California-based company’s CEO Dara Khosrowshahi, in a call with investors in March, had reportedly said that the platform's ride volume had gone down by as much as 60%-70% in the hardest-hit cities, owing to the Covid-19 lockdowns around the world.
The mobility business, just like the travel and hospitality business, has seen significant drop in demand given the full and partial lockdowns imposed across the globe to contain the spread of the Covid-19.
Uber India, on Monday, resumed services in 21 green and orange zone cities, as the Ministry of Home Affairs (MHA) announced considerable relaxations to lockdown restrictions.
Careem, an Uber Technologies subsidiary on Monday said that it would lay off 536 employees during the week, representing 31% of its workforce. The Dubai headquarters ride-hailing business is wholly owned by Uber and operates across the Middle East.