Uber to Cut 3,300 Jobs... Largest Layoff Since COVID-19

Cost Savings to Be Invested in Robotaxi Business

Uber will lay off 3,300 employees, representing about 10% of its total office workforce. This is the company’s largest restructuring since the Covid-19 pandemic. The company intends to focus the resulting cost savings on its robotaxi business.

Uber logo.

According to the Financial Times (FT) on September 2 (local time), Uber CEO Dara Khosrowshahi said in a message to staff that these layoffs aim to reduce organizational complexity and free up resources for future investments.

Uber is facing increasing competition in the robotaxi market from autonomous driving companies such as Alphabet’s Waymo, and is also experiencing challenges in its food delivery business. Since the start of this year, Uber’s share price has declined by approximately 7%.

Citi has estimated that the job cuts will enable Uber to save about $825 million per year. A significant portion of these savings is expected to be invested in new businesses, including the expansion of the robotaxi division.

Ronald Josey, an analyst at Citi, noted, “At least in part, this move appears to be possible because Uber’s investments in artificial intelligence (AI) have boosted productivity.”

Uber has already announced plans to invest more than $1 billion in expanding its robotaxi network. Leveraging the competitiveness of its platform, which has more than 200 million users worldwide, the company aims to gain an edge in the race to commercialize autonomous vehicles.

Uber plans to operate robotaxi services in at least 15 cities this year. In the autonomous driving market, it is competing with companies such as Waymo and Elon Musk’s Tesla for dominance in major cities.

On the other hand, performance in Uber's food delivery business varies by region. While Uber Eats has grown its market share in the UK, France, and Germany, the company is trailing behind DoorDash in the United States.

According to market research firm YipitData, DoorDash’s share of the U.S. food delivery market has reached about 64%, its highest level since the Covid-19 outbreak. Uber’s market share remains at approximately 31%.

Uber also plans to reduce the total number of managers by about 20%. As a result, some teams that previously reported directly to managers will be downsized. The company will also cut the number of so-called “micro-teams” composed of one to two members by half, and reduce the number of positions with more than seven levels of hierarchy below the CEO.

Workplace policies will be strengthened as well. Uber will restrict remote work eligibility to about 1% of its workforce and will require most employees to come to the office. The company will also enforce existing regulations, such as the three-days-per-week in-office requirement, more strictly.

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