Uber has announced to lay off 3,700 employees, which makes up about 14% of its workforce, as the company faces an uncertain future in the face of the novel COVID-19 pandemic.
The San Francisco-based company confirmed in a Securities and Exchange Commission filing that fewer people are taking rides due to novel coronavirus. The company has implemented a hiring freeze in addition to cutting thousands of jobs from its customer service and recruiting teams, it said in the filing.
Uber said it expects to spend about $20 million on severance and other benefits for the laid-off employees. Furthermore, the company CEO Dara Khosrowshahi will not be paid for the rest of the year. His salary was set for $1 million in 2019, with a possible $2 million bonus. In an email sent to all employees on Wednesday, Khosrowshahi wrote:
“Days like this are brutal, I am truly sorry that we are doing this, just as I know that we have to do this.”
Uber’s announcement follows similar cuts by tech companies including Lyft and Airbnb, fellows in the on-demand economy that has taken a plunge as people stay at home and try to avoid contact with others.
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Lyft said last week it would lay off nearly 1,000 people, or 17% of its staff, as the pandemic cuts into its revenue whereas Airbnb has started cutting 25% of its workforce which makes up around 1,900 people.