Lyft had warned of impending layoffs last week, and now it's taking action. The ridesharing company is cutting 1,072 jobs, or about 26 percent of its employees. It's also scaling back hiring and will scrub 250 open roles. The decision will carry severance and benefits costs of up to $47 million in the second quarter, but Lyft believes the savings will help with 'improvements" for drivers and passengers. More details are coming during an earnings call on May 4th.
The firm had already laid off 13 percent of its team in November last year. This latest decision also follows just weeks after co-founder Logan Green stepped down as CEO following a rough earnings call. Green said the company would have to boost spending to remain competitive with Uber. While neither Lyft nor Uber has turned a profit on an annual basis, Uber was profitable last quarter thanks to investments in other businesses.
New Lyft chief (and former Amazon executive) David Risher, who started this month, has called for streamlined business and a renewed focus on the "needs of riders and drivers." He's part of a broader executive shakeup that sees president and co-founder John Zimmer move to the board of directors, where Green still has a role.
Lyft is far from alone. Numerous tech giants have laid off staff in 2023, in many cases due to a rough global economy. However, its rival Uber has so far avoided severe cuts in recent months. Layoffs.fyi says Uber laid off about 60 engineers in Lithuania last fall, and 150 Uber Freight workers in January. This doesn't guarantee that Uber will avoid trouble, but it suggests the ride hailing giant is feeling less pressure than Lyft.