Uber said it will lay off 3,700 employees, or about 14 percent of its workforce, as the company faces an uncertain future in the face of the novel coronavirus pandemic.
The San Francisco-based company confirmed in a Securities and Exchange Commission filing that fewer people are taking rides in the time of covid-19, the disease caused by the virus. 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. 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.
“Days like this are brutal,” Khosrowshahi wrote in an email sent to all employees Wednesday. “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 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.
Uber spokesperson Lois van der Laan said in a statement the “unfortunate reality” is there isn’t enough work for many customer support employees because people are riding less. Lyft spokesperson Alexandra LaManna said the company had nothing further to share from its layoff announcement last week.
The three companies all rely on people sharing a close space with others — drivers and passengers in Uber and Lyft rides, and vacationers in Airbnb homes where owners often live or have recently left. That proximity has become a liability at a time where people are cautioned or ordered to keep their distance from others.
One exception is Uber Eats, the company’s restaurant delivery arm, where executives said demand has surged.
Uber is also closing 180 locations, or 40 percent, of its Greenlight Hubs, the physical locations where drivers can go for help on things such as onboarding or using the app. Uber temporarily closed all U.S. locations in March due to the pandemic.