Although the rate of infection has slowed down in many countries around the world, the economic shock and damages of Covid-19 are becoming clearer everyday.
Today, Uber announced that it was laying off 3,700 employees which accounts for 14% of their entire workforce.
Those who worked in customer support and driver recruiting were those affected by this move. In an email that he sent out to the employees, Uber CEO Dara Khosrowshahi said that the drop in global demand means Uber won’t be hiring for a while and thus the cut in those departments.
Khosrowshahi said that he will share the pain by not receiving his remaining salary for this year. Industry insiders estimate Khosrowshahi’s annual salary to be around $1 million.
As the travel industry collapsed around the world due to the lockdown measures, Uber and other firms like them have been hit extremely hard by the global pandemic. Uber’s biggest rival, Lyft have already laid off 1,000 employees at the end of April. Airbnb cut one quarter of their workforce this week.
The Information reported last month that Uber demand has fallen by 80% globally. While Uber’s performance had been worsening before the pandemic, the virus has definitely worsened an already bad situation.
The email from the CEO suggests that more employees may be losing their jobs in the near future. Khosrowshahi said that this was only the first step in what will be a long process as the company tries their best to retain their workforce. He also said that they were looking at all variables of the company.
The news comes just a day after California’s Attorney General sued Uber for not providing appropriate benefits to their drivers by exploiting their contracts. Uber had asked that gig workers like Uber drivers be classified separately.
At the same time, Uber still seems to have plans to widen their business. The Information reported that Uber was considering to invest more money into Lime. Lime is the world’s largest electric scooter renting company, and Uber is already a stockholder of the company.
Nevertheless, we hope that those who lost their jobs today do not stay that way for long. Share your thoughts with us in the comments, and be sure to follow us on Facebook for more news like this one.
Replaced!