Coronavirus: Uber announces drastic cuts to secure its future

Coronavirus: Uber announces drastic cuts to secure its future
Written by Chief Editor

Uber driver

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Uber has announced a drastic action plan to scale back its business as losses swell between the blocs of the pandemic.

The company said it will cut 3,000 more jobs, bringing the total reductions in the past few weeks to a quarter of the workforce.

It is also closing or consolidating more than 40 offices and liquidating units such as its artificial intelligence laboratory.

The head of the company said the moves were necessary “to secure our future”.

“We must establish ourselves as a self-sufficient company that no longer relies on new capital or investors to continue to grow, expand and innovate,” wrote CEO Dara Khosrowshahi in a letter to the staff.

“We must take these tough actions to be strong on our feet, to guarantee our future and continue our mission.”

80% drop

Even before the pandemic, Uber was struggling with huge losses. But its challenges multiplied as activity plunged during the pandemic.

Uber rides dropped 80% last month at the height of the lockouts in the United States and Canada. In the meantime, although its Uber Eats food delivery business has grown, it remains at a loss.

Earlier this month, Uber announced that it would cut 3,700 employees and warned of further reductions. Workforce cuts do not include drivers, which Uber considers to be independent contractors.

The offices concerned include hubs in San Francisco and Singapore, which will begin to close in the following year as the company selects a new regional office.

Uber said it would reorganize the remaining staff and reduce expenses in areas that are not part of its core personal transport or food delivery businesses, including its artificial intelligence labs.

Together, the shares are expected to reduce spending by $ 1 billion, the company said.

Wider impact

Uber’s actions are the latest sign of the ongoing economic impact of the virus and efforts to control it.

While some places have started to ease restrictions, many companies, especially those in the travel sector, have warned that it will take time to restore public confidence in the safety of many daily activities.

Uber’s little rival Lyft has also announced major job cuts, as well as airlines, hoteliers and booking platforms such as Airbnb.

“Given the dramatic impact of the pandemic and the unpredictable nature of any eventual recovery, we are focusing our efforts on our central mobility and delivery platforms and scaling our company to adapt it to the realities of our business,” said Khosrowshahi.

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