Last updated: April 22, 2023, 3:05 AM IST
Lyft is preparing to lay off hundreds of employees just days after new CEO David Risher began steering the ride-hailing service with a view to cutting costs to bring its rates more in line with those of its biggest rival , Uber.
Risher, a former Amazon executive, informed Lyft’s workforce of more than 4,000 employees in an email posted online Friday that a “significant” number of them will lose their jobs. It came at the end of his first week as CEO of Lyft.
The note did not specify how many people would be jettisoned, but The Wall Street Journal reported that at least 1,200 workers will be laid off. The report cited unidentified people familiar with the cost-cutting plans.
San Francisco-based Lyft did not immediately respond to a request for comment.
Risher, who had served as a board member of Lyft before being hired to replace co-founder Logan Green, called expense control one of his top priorities during an interview with The Associated Press shortly after his hiring was announced. By making sure Lyft is “super-efficient,” Risher said the company would be in a better position to cut its fares to lure back passengers who were more likely to switch to Uber because that service offered lower prices for the same trips.
It was a theme that Risher re-emphasized in his Friday email, explaining why he decided to cut payroll, which doesn’t include drivers at Lyft — a group classified as independent contractors.
“We must reduce our costs to provide affordable rides, attractive driver revenues and profitable growth,” Risher wrote.
Lyft plans to notify employees laid off Thursday when the company plans to close its offices.
It marks the second round of recent job cuts for Lyft after laying off 700 employees last year.
Recurrent wave of layoffs is a new phenomenon in the technology industry, turning around more than a decade of largely unbridled growth.
Both Facebook owner Meta Platforms and e-commerce giant Amazon have endured two rounds of major layoffs in the past year, largely because the pandemic fueled growing demand for digital services and products, resulting in hiring that they and other tech companies have begun to regret . as the threat of COVID-19 receded and growth slowed.
The pandemic initially hit Lyft by drying up demand for ride-hailing services, a blow that Uber was able to soften through an aggressive expansion of food delivery. That gave people a reason to keep using the Uber app, even if they were stuck at home as Lyft fell out of favor.
In the past year, it’s become even more apparent that consumers have fallen out of the Lyft habit as Uber ridership returned to pre-pandemic levels and Lyft’s losses mounted. Those struggles have resulted in Lyft’s stock price falling 69% over the past year, prompting the decision to appoint a new CEO to shake things up.
Shares of Lyft rose 6% after news of its cost-cutting plans broke Friday at $10.44.
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(This story has not been edited by News18 staff and was published from a syndicated news agency feed)