Ride-hailing giant Uber Technologies (NYSE:UBER) is planning a second round of job cuts and cost-saving measures, according to an email to employees from CEO Dara Khosrowshahi.
The company already announced 3,700 job cuts on May 6. This new round of 3,000 additional cuts would leave Uber with about 20,000 employees. If the new cuts occur this month, Uber will have shed about 25% of its workforce in May. That doesn't count the company's drivers, who are considered to be contractors rather than employees.
Uber's shares were up over 6% in today's trading.
More changes afoot
In addition to the job cuts, Khosrowshahi said Uber would close 45 offices, including in San Francisco's Pier 70. The tech company also may scale back on noncore areas like freight shipping and driverless technology.
The one bright spot in Uber's portfolio, food delivery business Uber Eats, has outperformed during the pandemic, with gross bookings up 50% over last year. However, that doesn't make up for the decline in ridership in its flagship ride-hailing business. Uber has reportedly made an offer to acquire rival GrubHub (NYSE:GRUB) to increase its share of the food delivery business, but so far there's been no official announcement.
A dire picture
In his email, Khosrowshahi paints a bleak picture of how COVID-19 has affected the company's prospects:
We began 2020 on an accelerated path to total company profitability. Then the coronavirus hit us with a once-in-a-generation public health and economic crisis. People are rightfully staying home, and our Rides business, our main profit generator, is down around 80%. We're seeing some signs of a recovery, but it comes off of a deep hole, with limited visibility as to its speed and shape.
Despite this grim assessment, Uber shares are up 16% year-to-date.