Last Update: April 22, 2023, 03:05 AM IST
Lyft is preparing to lay off hundreds of employees after new CEO David Risher launched the ride-hailing service with an eye to slashing costs to help its fares bring more in line with its biggest rival, Uber.
Risher, a former Amazon executive, informed Lyft’s workforce of more than 4,000 employees in an email posted online Friday that a “significant” number of them would lose their jobs. It came at the end of his first week as CEO of Lyft.
The note did not specify how many people would be laid off, but the Wall Street Journal reported that at least 1,200 employees would be laid off. The report cited unnamed people familiar with the cost-cutting plans.
San Francisco-based Lyft did not immediately respond to a request for comment.
Risher, who was a Lyft board member before being hired to replace co-founder Logan Green, listed expense control as one of his top priorities during an interview with The Associated Press shortly after the appointment was announced. cited. By ensuring Lyft is “super efficient”, Risher said the company would be in a better position to lower its fares to entice commuters who had shifted to using Uber more often because that service was less expensive for the same number of trips. was offering low prices for
It was a theme Rischer reiterated in his Friday email explaining why he decided to reduce payroll, which does not include Lyft’s drivers — a group classified as independent contractors.
“We need to lower our costs to deliver affordable rides, attractive earnings for drivers, and profitable growth,” Risher wrote.
Lyft intends to begin notifying employees who will be laid off on Thursday, when the company plans to close its offices.
This would mark the second round of recent job cuts for Lyft after laying off 700 employees last year.
Recurring waves of layoffs are emerging as a new phenomenon in the tech industry, reversing more than a decade of rampant growth.
Facebook owner Meta Platforms and e-commerce giant Amazon have gone through two rounds of major layoffs over the past year, largely because the pandemic spurred increased demand for digital services and products, resulting in them and other technology Companies started regretting. As the threat of COVID-19 recedes and growth slows down.
The pandemic initially beset Lyft by drying up demand for ride-hailing services, a blow Uber was able to soften through aggressive expansion into food delivery. It gave people a reason to continue using Uber’s app while they were stuck at home while Lyft fell out of favor.
Over the past year, it has become even more apparent that consumers have fallen out of favor with Lyft as Uber ridership returned to pre-pandemic levels and Lyft’s losses widened. Those struggles have caused Lyft’s share price to drop 69% over the past year, prompting the decision to bring in a new CEO to shake things up.
Shares of Lyft rose 6% after news of its cost-cutting plans closed at $10.44 on Friday.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)