Uber to slash 10% of workforce in push to streamline
Uber Technologies announced on Wednesday that it plans to reduce its global workforce by approximately 10% as part of a major organizational restructuring. In a memo to employees, CEO Dara Khosrowshahi stated that the company will focus on its biggest growth opportunities by removing layers, simplifying team structures, and optimizing its global deployment strategy. Although the company's second-quarter revenue increased 12% year-over-year to $14.2 billion, the complexity brought by growth prompted this adjustment.
Dive Brief:
- Uber Technologies plans to reduce its global workforce by about 10% as part of a major organizational restructuring, the ride-hailing company announced Wednesday.
- Among its changes, the company has cut by nearly 50% the number of “micro-teams” with only one or two direct reports and the number of employees that sit seven or more layers under the chief executive by 20%.
- “We are removing layers, simplifying team structures, refining our global location strategy and focusing our people and investments against the biggest opportunities ahead of us,” CEO Dara Khosrowshahi said in a memo to employees that was later posted online.
Dive Insight:
The company is cutting jobs despite reporting last month that it generated $14.2 billion in total revenues for the second quarter, a 12% increase from the year earlier period. Adjusted earnings before interest, taxes, depreciation and amortization grew 33% year over year to $2.8 billion.
During an earnings call at the time, Khosrowshahi called the period an “outstanding quarter.”
On Wednesday, he said the company’s growth over the last several years has brought complexity, including “structures that made sense when businesses were smaller but no longer serve us well at our current scale.”
“The changes we’re making today are designed to do two things: make Uber simpler and faster, and create more capacity to invest in our future,” he said. “A leaner organization will mean clearer ownership, faster decisions and more time spent building rather than coordinating.”
The effort, Khosrowshahi said, will also generate savings that can be reinvested in growth, innovation and “capabilities that will matter most over the coming years.”
As part of last month’s earnings results, the company announced plans to spend more than $10 billion on robotaxis in coming years.
“When you dig into this, there are two distinct kinds of investments we're talking about,” CFO Balaji Krishnamurthy said during the earnings call. “The first one is soft investments in our AV [autonomous vehicle] software partners ... The second piece is really focused on using our balance sheet selectively to bootstrap the AV infrastructure on the ground.”
Krishnamurthy was appointed CFO of Uber earlier this year after serving as vice president of strategic finance.