Ride-hailing start-ups Uber (UBER +0.84%) and Lyft (LYFT +1.56%) are considering workforce reductions as the COVID-19 pandemic continues to hammer their businesses.
In a regulatory filing Wednesday, Lyft announced that it will be letting go of 982 employees, or about 17% of its workforce, and furloughing 288 as it seeks to cut expenses during the pandemic.
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In addition to furloughing employees, Lyft is reducing the base salary for employees for a twelve-week period starting in May. Executives will see their salaries reduced by 30%, vice presidents will get a 20% cut, and all other employees will lose 10% of their salaries. Board members are forgoing 30% of their cash compensation during the second quarter, Lyft said in the filing. Lyft expects to take a $28 million to $36 million charge, most of it in the second quarter, as a result of the restructuring.
Meanwhile, The Information reports that Uber is mulling cutting 20% of its workforce due to the pandemic. If that happens it could amount to as many as 5,400 Uber employees losing their jobs. The plan hasn't been finalized but if Uber moves ahead, the company is expected to conduct the layoffs in stages rather than at one time. According to The Information, Uber is seeing an 80% decline in its business amid the pandemic. Earlier this month Uber withdrew its guidance for 2020 because of COVID-19 uncertainty.
Separately, in an SEC filing, Uber announced that its Chief Technology Officer Thuan Pham, the longest-serving executive at the ride-hailing company, is resigning effective May 16. Pham said he was comfortable leaving now because the engineering team is at "peak productivity." Pham's group could see workforce reductions of close to 800.
Ever since the COVID-19 pandemic hit, Uber and Lyft 's businesses have been suffering. With millions of people working and staying home, there has been little need for ride-hailing services.
