Uber reopens the bleeding of major global workforce restructurings. The company has announced that it will lay off about 3,300 employees, a figure that represents about 10% of its total workforce worldwide, with the aim of reducing management hierarchy and investing more in its shared transportation, delivery, and robotaxi divisions. The company announced the changes in an internal email sent by CEO Dara Khosrowshahi and published online on Wednesday.
According to the email, the layoffs are part of a restructuring that will reduce the number of managers by 20%, and some employees in these positions will move to work as individual contributors.
After the announcement, Uber shares rebounded about 2% on the New York Stock Exchange. However, over the past year, the shares have dropped around 17%. Currently, the company has a market capitalization of just over $155 billion (more than €133 billion).
The ride-sharing giant is halving the number of one- or two-member teams and laying off employees who are “more than seven levels below the CEO,” according to Bloomberg. Khosrowshahi’s email indicated that the company is merging its engineering, science, and delivery divisions. It is also unifying its delivery operations into the restaurant, retail, and direct delivery divisions.
“We have created new products, expanded into new businesses, reached more consumers, and supported more income-generating people, becoming a much larger and stronger company. But that growth has also brought complexity: more hierarchical levels, more coordination, more fragmented ownership, and, in some cases, structures that made sense when the companies were smaller but no longer serve us at our current scale,” Khosrowshahi wrote in the email.
Khosrowshahi stated that the changes “will generate savings that we intend to reinvest in growth, innovation, and the capabilities that will be most important in the coming years.” The executive specified that more investment will be made in drivers, couriers, and merchants worldwide, as well as improvements in its core business and the work being done to build an autonomous future.
Read more New sabotages against critical infrastructures put Germany on alert
Overall, Uber is engaged in an aggressive growth strategy. Last July, it announced a merger agreement with Delivery Hero, extending the world’s largest mobility and delivery platform to a total of 99 markets. The new company would have a combined pro forma gross revenue of $236 billion in 2025.
According to the terms of the voluntary public takeover offer, Uber offers Delivery Hero shareholders a cash consideration of €41.50 per share, representing a valuation of $14.8 billion for 100% of the company, or $13.7 billion adjusted for prior share purchases made by Uber. The transaction includes Delivery Hero’s sale of operations in 14 markets, including Glovo Spain, to the U.S. investment firm SSW Partners.
The aforementioned restructuring is announced after Uber committed to investing more than $10 billion in robotaxi partnerships in the coming years, aiming to transform its service into the reference platform for ordering autonomous vehicles. The company has reallocated capital over the past year, including reducing its stake in some companies and investments in Avride, Lucid Group, Nuro, and Rivian Automotive.
Similarly, Uber and the Chinese company Pony AI announced in mid-August an agreement to deploy more than 2,000 robotaxis across Europe, accelerating the race to commercialize autonomous mobility in the region. The initiative will consolidate the existing collaboration between the two companies in Zagreb (Croatia) since early this year.
The company has maintained its growth trend. In the second quarter, its revenues increased by 12%, reaching $14.2 billion, with a 29% increase in profit, up to $1.7 billion. Gross bookings grew 24% year-over-year to reach $58 billion. Looking ahead to the third quarter, gross bookings are expected to be in the range of $58.25 billion to $60.25 billion, representing year-over-year growth of 18% to 22% at constant exchange rates.
Read more ‘BbY WOW’, the “conjunction of stars” that took Judeline’s song with Karol G to the top
