683 Lyft employees will be laid off as part of the company’s cost-cutting efforts.
Ride-hailing giant Lyft is laying off 683 employees as part of a cost-cutting effort, the company said on Tuesday.
The move comes as Lyft, which is scheduled to go public next month, looks to cut costs ahead of its debut on the stock market.
The layoffs will affect 9% of Lyft’s workforce and are the biggest round of job cuts in the company’s history. The company will take a $60 million charge because of layoffs.
Six hundred and eighty-three Lyft employees will be laid off as part of its cost-cutting measures
Lyft is laying off 683 employees across the U.S. in a cost-cutting push that will center on its human resources, marketing, and recruiting teams.
The ride-hailing company announced the layoffs in an email to staff on Tuesday, saying the move was necessary to achieve profitability. The company has been burning through cash as it battles Uber for supremacy in the U.S. market and has been under pressure from investors to cut costs.
“We need to get to profitability and ensure our long-term health as a business,” Lyft co-founder and president John Zimmer wrote in a company-wide email.
The layoffs represent about 9 percent of Lyft’s 7,000 employees worldwide. Most of the affected workers are based in San Francisco, where Lyft is headquartered, but there are also cuts in New York, Seattle, and other cities.
How will this affect Lyft’s business?
Lyft’s decision to let go of employees will affect its business. The company has been under pressure to cut costs, and this move will help it achieve that goal. However, the layoffs will also reduce the company’s workforce and could lead to lower morale among the remaining employees. It is unclear how Lyft will manage its business without the affected employees.
How will this affect the rideshare industry?
The coronavirus pandemic has decimated ride-sharing demand, and Lyft is feeling the pinch. The company announced yesterday that it would release 982 employees, or 14% of its workforce.
This is a significant blow to the rideshare industry, which has already been struggling to compete with traditional taxi and transportation companies. The pandemic has only exacerbated those problems, as people are hesitant to use shared ride services.
Lyft’s layoffs will have a ripple effect throughout the industry as other companies attempt to cut costs to stay afloat. This could mean fewer drivers on the road, higher prices for riders, and shorter wait times for cars. Rideshare is going through a tough time, and it’s unclear when the industry will recover.
Why is Lyft laying off employees?
As the coronavirus pandemic continues to ravage the economy, many companies are forced to make tough decisions to stay afloat. That means many workers are losing their jobs.
Lyft is the latest company to announce layoffs, saying it will cut about 1,000 employees from its workforce. The ride-hailing company has been hit hard by the pandemic, with ridership plummeting as people stay home to avoid spreading or contracting the virus.
The layoffs are meant to make the organization more efficient.
With the layoffs, Lyft expects to save money, but it is seeking to raise $600 million in new financing.
That money will be used in part to help offset some losses caused by the pandemic.
Lyft says it will offer severance packages and outplacement services for those who are losing their jobs to help them transition to new employment. The company also says it is committed to rehiring as many laid-off employees as possible when business picks back up.
Lyft is the latest company to release workers to cut costs. The ride-hailing firm said it would eliminate 683 positions, or about 5% of its workforce, as part of a broad restructuring announced late last month.
Lyft has been hit hard by the coronavirus pandemic, with ridership plummeting and losses widening. The company has already announced several rounds of layoffs and other cost-cutting measures, including the closure of its self-driving car division.