said it is cutting 13% of staff, or nearly 700 jobs, the latest technology company to say it needed to reduce costs ahead of choppy economic conditions.
Confirming an earlier report by The Wall Street Journal, Lyft co-founders John Zimmer and Logan Green announced the cuts to staff Thursday. “There are several challenges playing out across the economy. We’re facing a probable recession sometime in the next year and ride-share insurance costs are going up,” they wrote in the memo viewed by the Journal.
“We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives. Still, Lyft has to become leaner, which requires us to part with incredible team members,” they added.
The ride-hailing company has more than 5,000 employees, which don’t include its drivers. Lyft laid off 60 people, or under 2% of its workforce, in July. In May, he said he planned to slow hiring and reduce the budgets of some of its departments.
Technology companies large and small have been announcing hiring freezes or staffing cuts this year after many hired at a breakneck speed through the pandemic and now confront a tougher economic outlook. This week, Amazon.com Inc.
told employees it is pausing corporate hiring and payments startup Stripe Inc. said Thursday that it is laying off about 14% of its employees. Both blamed the harsh economic climate for their decisions.
San Francisco-based Lyft also said that it would sell its vehicle service centers and that most of that team is expected to receive roles from the acquiring company, which it didn’t name. Lyft has centers in nine markets.
The company maintained its third quarter and 2024 earnings outlook but said it expects to incur $27 million to $32 million in restructuring related to Thursday’s layoffs in this year’s fourth quarter. The company posts third-quarter results Monday.
Lyft shares have underperformed the broader market over the past 12 months. Through Wednesday’s close, its stock was down 71% from a year ago while the tech-heavy Nasdaq Composite Index was down 33%.
Rival Uber Technologies Inc.’s
diversified business, which includes global rides operations and a food-delivery arm that became its lifeline during the pandemic, has fared better with Wall Street. Its stock is down about 37% in the past year.
In May, Uber said it would slow hiring. Both companies have struggled with a driver shortage over the past year, an imbalance that has pushed ride fares to record highs. Uber said active drivers and riders returned to prepandemic levels for the first time in this year’s third quarter.
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