Lyft, one of the largest ride-sharing companies in the US, plans to lay off 26% of its staff, or 1,072 employees. The downsizing, detailed in a filing with the US Securities and Exchange Commission, is part of a larger cost-cutting strategy announced by CEO David Risher earlier this month, just as he joined the company.
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The filing also revealed that the company will slash more than 250 open positions. Lyft estimated the downsizing would cost between $41 million and $47 million in severance packages, as well as possible additional costs incurred by stock-based compensations.
The layoffs are just the latest in a series of job cuts in the tech industry, and at Lyft itself. The company laid off 683 employees last November, or roughly 13% of its workforce. According to Layoffs.fyi, a website tracking headwinds in the tech industry, almost 350,000 people have been laid off by more than 1,000 tech companies since last year.
Lyft has struggled to compete with Uber, the largest ride-sharing company in the US by market share. Lyft shares have fallen by 90% since it went public in 2019.
Shares of Lyft rose slightly on the news, up 1.5% to $10.20 in New York at the market’s close. The filing said Lyft would provide more details about its cost-cutting plan in its first-quarter earnings call, scheduled for May 4.
Lyft shares have declined in 2023, despite a brief rebound
Recent layoffs in Big Tech:
March 14: Meta announces 10,000 layoffs, building on earlier downsizing as part of its year of efficiency.
March 20: Amazon announces a new round of layoffs—following last November’s job cuts—letting go of roughly 9,000 employees.
March 22: Indeed, the online job search platform, announces it will cut 15% of its staff, or 2,200 employees.
March 23: Accenture announces it will slash 19,000 jobs, or 2.5% of its total workforce.
March 30: Roku, the video-streaming service and hardware, announces downsizing affecting 6% of its workforce.
March 31: Netflix confirms it plans to lay off an unspecified number of employees.
April 3: Apple, one of the last holdouts in the industry trend, announces that it will lay off a small number of employees on its corporate retail teams.
April 27: Dropbox, the data storage company, announced it was laying off 500 employees, or 16% of its staff.
????New Amazon layoffs are the latest correction to years of over-hiring in the tech industry
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In yet another cost-cutting measure, popular ride-sharing company Lyft is planning to lay off 17% of its full-time staff, or about 1,000 workers, in a move to reallocate resources more strategically and remain competitive amid the current economic crisis.
The layoffs will affect both corporate, ride-sharing, and bike-sharing divisions, including cuts to positions in the engineering, design, product, and recruiting teams. Those impacted by the cuts will receive severance packages and job placement assistance while Tesla, Uber, and other leading technology companies have also announced staff reductions in recent months.
In announcing the cuts, Lyft co-founders Logan Green and John Zimmer said: “These are some of the most difficult decisions we have had to make and not ones that we take lightly. We understand the impact to our team will be profound, and it is with a heavy heart that we are sharing this news.”
The announcement comes as the economy is particularly turbulent, and follows a series of struggles for the ride-sharing giant, including the death of a customer, a potential IPO and operational issues, leading to decreased profits. The company has also recently stepped into new markets, such as London, as part of its long-term strategy for growth.
The new development is yet another example of the events in the technology field which is being affected by the market conditions. Lyft was founded in 2012 and has grown to become a mainstay in the world of ride-sharing, two years ago it acquired rival bike-sharing company Motivate and announced an expansion of its autonomous vehicles program.
We understand that these are difficult times for more than just Lyft’s workers, with many organizations having to face tough decisions, however, this latest downsizing is likely to have a trickle-down effect on the companies Lyft works with and the millions of riders it serves. Although the difficulties of this situation are immense, it is important to remain open to new opportunities and find innovative ways of working through these challenging times.