Uber has just laid off around 350 employees across a variety of teams within the organization, marking what the company says is its third and final phase of layoffs of the process it began earlier this year, Uber CEO Dara Khosrowshahi said to employees today in an email obtained by TechCrunch (full email below). Those affected include employees from Eats, performance marketing, Advanced Technologies Group and recruiting, as well as various teams within the global rides and platform departments. Some employees have also been asked to relocate.
“Days like today are tough for us all, and the ELT and I will do everything we can to make certain that we won’t need or have another day like this ahead of us,” Khosrowshahi wrote in the email. “We all have to play a part by establishing a new normal in how we work: identifying and eliminating duplicate work, upholding high standards for performance, giving direct feedback and taking action when expectations aren’t being met, and eliminating the bureaucracy that tends to creep as companies grow.”
In total, the layoffs represent about 1% of the company, an Uber spokesperson told TechCrunch. All of this comes about one month after Uber laid off 435 employees across its product and engineering teams and less than three months after Uber laid off about 400 people from its marketing team. At this point, most departments at Uber have been affected by layoffs.
For Uber’s self-driving car unit, this is its first round of layoffs since it spun out into its own unit earlier this year. Uber has previously said the team consists of more than 1,200 people and today still employs more than 1,200, despite the layoffs. according to an Uber spokesperson. Based on the terms of ATG’s $1 billion fundraising round in April, the unit is worth $7.25 billion on a post-money basis.
More than 70% of those affected in this round of layoffs are based in the U.S. and Canada, and the rest are relatively evenly distributed across APAC, Latin America and EMEA. Uber notified those affected this morning.
As TechCrunch previously reported, these layoffs are a result of Khosrowshahi asking every member of his executive leadership team if they were to start from scratch, would their respective organizations look the way they do?
“As you know, over the past few months, our leaders have looked carefully at their teams to ensure our organizations are structured for success for the next few years,” Khosrowshahi wrote to employees. “This has resulted in difficult but necessary changes to ensure we have the right people in the right roles in the right locations, and that we’re always holding ourselves accountable to top performance.”
In Q2 2019, Uber lost more than $5 billion — its biggest quarterly revenue loss to date — though a chunk of its losses were a result of stock-based compensation expenses for employees following the company’s IPO in May.
In other parts of Uber’s business, it’s continuing to invest money in ensuring its drivers remain 1099 independent contractors. Already, Uber, along with Lyft and DoorDash, put $30 million toward a 2020 ballot initiative that would enable them to keep their drivers as independent contractors. In light of gig worker protection bill AB-5 passing in the California State Senate and Assembly, Uber Chief Legal Officer Tony West made it clear the company was willing to invest more money into that campaign initiative. California Governor Gavin Newsom has since signed that bill into law, which goes into effect January 1, 2020.
While West said he believes Uber would pass the test and prove its drivers are properly classified, there would surely be a financial impact if Uber fails the test. West did not comment on what that impact could be, but industry analysts have estimated a change in classification for drivers could result in up to a 30% cost increase.
Uber will report its Q3 earnings on November 4. The company is currently trading at $31.26 per share, which is well below its IPO pricing of $45.
Below is Khosrowshahi’s full email with the subject line, “Stronger moving forward”:
Team Uber,
As you know, over the past few months, our leaders have looked carefully at their teams to ensure our organizations are structured for success for the next few years. This has resulted in difficult but necessary changes to ensure we have the right people in the right roles in the right locations, and that we’re always holding ourselves accountable to top performance.
Today is the last wave of a process we began months ago with our Marketing team, and more recently, with our Product and Engineering teams. This time, ATG, Eats, Global Rides and Platform (Rides Ops, CommOps, Safety & Insurance, U4B, and Product Ops), Performance Marketing, and Recruiting have made changes. As part of this exercise, some of our employees are being asked to relocate, and around 350 will be leaving the company.
Days like today are tough for us all, and the ELT and I will do everything we can to make certain that we won’t need or have another day like this ahead of us. We all have to play a part by establishing a new normal in how we work: identifying and eliminating duplicate work, upholding high standards for performance, giving direct feedback and taking action when expectations aren’t being met, and eliminating the bureaucracy that tends to creep as companies grow.
We have proven ourselves to be not only one of the most ambitious and innovative companies in the world, but also one of the most resilient. We’ve always pushed through tough times and come out the other side a better and stronger company—that will continue to be true tomorrow, and every day after.
As always, we’ll be at the All Hands tomorrow and will dedicate most of the time to answer your questions. Add yours to the slido here.
Eyes forward—back to building.
Dara