Uber lays off over 6,700 employees in 2 weeks... Demand plunges 80% compared to a year ago

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Uber, the largest car-sharing company in the U.S., which was hit hard by the novel coronavirus disease (COVID-19), has decided to lay off an additional 3,000 employees, the Wall Street Journal (WSJ) reported on the 18th (local time).

According to the report, Dara Khosrowshahi, Uber's CEO, announced in an email to employees that the company will lay off more than 3,000 employees and close 45 offices. Among these is an office in San Francisco with over 500 employees. WSJ reported that this move is expected to hit U.S. employees the hardest. Uber also stated that it is considering relocating its Asia regional headquarters, currently located in Singapore, to another region.

Earlier, on the 6th, Uber announced it would lay off about 3,700 employees, accounting for 14% of its global workforce.

Now, less than ten days later, it has decided to cut an additional 3,000 employees. This amounts to 25% of Uber's total workforce. Uber drivers are not included in this layoff.

Uber expects to spend approximately $145 million on severance pay and about $80 million on office closures during this round of layoffs.

Additionally, CEO Khosrowshahi stated that large-scale new business investments, such as freight transportation and autonomous driving technology, will be fully re-evaluated. Non-core businesses, including the artificial intelligence (AI) research lab and product incubators, will also be streamlined.

Meanwhile, Uber is negotiating to acquire the food delivery company Grubhub. As of April, Uber's ride-sharing service had decreased by 80% compared to the previous year, but Uber Eats' order volume in the first quarter increased by 52% year-over-year. Uber's loss in the first quarter of this year amounted to $2.9 billion (approximately 3.5 trillion KRW).

This content was produced with the assistance of AI translation services.