Lyft to cut or furlough 1,300 employees amid the coronavirus pandemic

Lyft said the layoffs and furloughs, which represent about 22% of its workforce, are due to the impact of the coronavirus on its ride-hailing business.

Lyft to cut or furlough 1,300 employees amid the coronavirus pandemic

Lyft plans to lay off nearly 1,000 employees and furlough another 300 because of the impact of the coronavirus on the ride-hailing business.

The layoffs and furloughs, announced Wednesday, represent 22% of Lyft’s workforce, which totaled 5,700 in December.

Additionally, Lyft will cut salaries over the next 12 weeks by 30% for top executives, 20% for vice presidents, and 10% for employees. Board members will forgo 30% of their cash compensation during the second quarter.  

“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.”

Lyft’s layoffs come a day after a report from news site The Information said Uber is also considering job cuts that would affect up to 20% of its workforce. Both Uber and Lyft have suffered severe slowdowns of their ride-hailing businesses, as people stay home during the pandemic. It also comes just a few months after both companies, which have been reporting multimillion-dollar losses since going public, said they would become profitable, minus certain accounting expenses, by or in 2021—plans that most likely have been derailed by the virus. 

Lyft’s stock was up 5% in midday trading on Wednesday to $34.45, signaling investor support for the cuts. Those layoffs are expected to cost up to $36 million during the second quarter, primarily for employee severance and benefits, according to a regulatory filing.

Lyft will report its earnings on May 6, and Uber on May 7, giving investors a better understanding of how much revenue declined for both companies due to the virus. Last month, Uber CEO Dara Khosrowshahi told investors that the company would survive the crisis, given its “strong” balance sheet and $10 billion in unrestricted cash. He also said that the company was “extensively” stress-testing its business model, and suggested that Uber would emerge from the crisis. 

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.

More must-read tech coverage from Fortune:

—Who is new AT&T CEO John Stankey?
—Work from home tips from the executive team that brought you Zoom
—Is A.I. better at diagnosing illnesses than doctors? Don’t believe all the hype
—Facebook debuts Zoom-like video chat feature called Messenger Rooms
—Listen to , a Fortune podcast examining the evolving role of CEO
—WATCH: Zoom’s ups and downs since the coronavirus crisis

Catch up with , Fortune’s daily digest on the business of tech.

Source : Fortune More   

What's Your Reaction?


Next Article

Mayor London Breed gets along with her governor. But her ‘heart goes out to’ city leaders who don’t

The San Francisco leader sympathizes with the situation facing Atlanta Mayor Keisha Lance Bottoms.

Mayor London Breed gets along with her governor. But her ‘heart goes out to’ city leaders who don’t

Mayor London Breed took decisive action to lock down San Francisco in February before the city had a single confirmed case of the coronavirus. But she says she was lucky to have the support of California’s governor—and that her “heart goes out to” peers like Atlanta Mayor Keisha Lance Bottoms who have sparred with state leadership.

“She is an incredible person and doing a great job despite the circumstances,” Breed said of Bottoms, who has questioned Georgia Gov. Brian Kemp’s decision to reopen nonessential businesses in the state. “We are fortunate to be in California, to have Gov. Gavin Newsom because he’s a San Franciscan.”

Breed joined Fortune‘s Most Powerful Women community via video chat on Wednesday to talk to female business leaders about navigating the crisis. Breed is sheltering in place at her own home while deciding the future of her city’s shelter-in-place orders; she joins Newsom and 12 other California city mayors for regular phone calls. “We expected the challenges that continue to exist with the federal government, but we are fortunate we are not in a similar situation as other cities,” she says of Republican-Democratic and city-state disagreements.

A self-avowed reluctant vegetable eater, Breed is getting her nutrition from a local juice shop and relaxing by taking walks and watching the Netflix series Tiger King. She shares those details for a reason; her own experience informs how she plans to eventually reopen the city. Could nonessential businesses, like local clothing boutiques, begin operating by adopting the pickup and delivery-only guidelines currently limited to establishments like Breed’s local juice shop? It’s all on the table—although Breed says she won’t do anything that risks “rolling back the gains we’ve made” because the coronavirus curve can “shoot up out of nowhere.”

Even though Breed’s early action—informed, she says, by public health professionals and the decisions of the Bay Area’s tech giants, who were immersed in the coronavirus crisis earlier through their offices outside the U.S.—is now widely seen as prescient, she understands that telling people not to leave their homes doesn’t make her the most beloved figure. “The mayor’s not always popular,” she says. “But I can’t let that consume me.”

More on the most powerful women in business from Fortune:

—How Global 500 companies are responding to the coronavirus
—14% of women considered quitting their jobs because of the coronavirus pandemic
—Why and the 1970s fight over the ERA are more relevant than ever
—Inside —Listen to , a Fortune podcast examining the evolving role of CEO

Keep up with the world’s most powerful women with newsletter.

Source : Fortune More   

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.