Ride hailing giant, Uber, has announced that it is laying off 3,700 employees globally due to the adverse effect of the coronavirus. The layoffs will mainly affect those in support and recruiting divisions.
According to the company in a filing with the US Securities and Exchange Commission, this is one of the plans to reduce its operating expenses in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the Company’s business.
The company estimates that it will incur approximately $20 million related to severance and other termination benefits.
The Company says that it is also evaluating other costs and will provide an update in subsequent SEC disclosures regarding such amounts, if material.
Figures from the Q1, 2020 financial results show that even though there was a slight increase in bookings and revenue, the company experienced a loss in profit.
Uber’s gross bookings (the value of goods and services sold on Uber’s platform) rose 8% compared to Q1 2019 to $15.8 billion while revenue grew 14% from $3.1 billion to $3.54 billion in the quarter on a year-over-year basis. The company lost a staggering $2.94 billion in the quarter.
In a related event, one of its businesses, UberEats announced that it would be shutting down its operations in Egypt, Czech Republic, Honduras, Romania, Saudi Arabia, Uruguay and Ukraine by June 2020 and transferring its operations in the United Arab Emirates (UAE) to Careem, the Dubai-based ride-hailing and delivery company that was acquired by Uber last year.
Last year, Uber laid off over 1,500 employees as part of its global restructuring exercise, with the last layoff occurring in October 2019 affecting about 350 employees. The first layoff of 400 employees which was in July last year affected the marketing function. The second, in September, affected 435 employees in the Product and Engineering teams.
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