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Lyft Plans 2% Job Cuts, Promises Investors It Will Make Profit In 2020

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Lyft Inc. plans to cut about 90 jobs in order to deliver on its promise to stop losing money by the end of 2021.


The company said the dismissals represent about 2% of its employees and affect the marketing and sales departments. Lyft also said it intends to hire more than 1,000 people this year despite the dismissals.


“We’ve carefully evaluated the resources we need to achieve our 2020 business goals, and the restructuring of some of our teams reflects that. We are still growing rapidly and plan to hire more than 1,000 new employees this year,” said Alexandra LaManna, a Lyft spokeswoman.

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Lyft plans job cuts
Lyft is facing doubts and pressure from its investors


Since going public in 2019, Lyft has been struggling. Like Uber, Lyft’s multibillion-dollar business operates by heavily subsidizing the cost of its rides for customers and offering bonuses to its drivers.


Both Uber and Lyft have reduced the subsidies in recent months as a response to pressure from investors to turn a profit.

Lyft pledges to make profit

Uber, is a popular ride-hailing app in the US, however, it eliminated more than 1,000 jobs, far more than what Lyft proposes. The two companies are also contesting the new California law (AB 40) that seeks to reclassify their drivers as employees as opposed to independent contractors.


Analysts estimate that the change could result in an increase in the pricing of its services by as much as 30%.


Lyft plans to report its 2019 financial results on 11 February  2020. It said that it expects its 2019 revenue to be around $3.57 billion to $3.58 billion. This is due to an increase in ridership. The company has pledged to begin to make a profit by the fourth quarter of 2021.


Lyft has faced doubts for months. After the company went public, its stock price tumbled below its offering price on the second day of trading. The company’s stock price has also not recovered since.


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