Uber in a filing with the Security and Exchange Commission says it will lay off about 14 percent of its global workforce. It is expected that the lay off will affect its employees in recruiting and customer support roles.
Uber CEO, Dara Khosrowshahi will also get no pay for the rest of the year as the company does its best to survive in the wake of the COVID-19 pandemic.
In 2019, Khosrowshahi made $1 million in base salary. The vast majority of his compensation was from bonuses and stock awards.
Uber will incur up to $20 million in severance and other termination-related expenses. About 3,700 full-time employees are set to be affected by the layoffs.
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“With people taking fewer trips, the unfortunate reality is that there isn’t enough work for many of our front-line customer support employees. Since we don’t know how long a recovery will take, we are taking steps to bring our costs in line with the size of our business today.
“This was a tough decision, but it is the right one to help protect the company’s long-term health and ensure we come out of this crisis stronger,” an Uber spokesperson said.
Uber is not the only one affected in its industry. Lyft, Uber’s main rival, would also be laying off about 1,000 its employees, representing about 17 percent of its workforce. Uber’s Middle Eastern subsidiary, Careem, laid off more than 30 percent and suspended its bus transport app.
A shortfall in revenue is not the only problem that Uber is dealing with. In California, Attorney General Xavier Becerra and other city attorneys filed a lawsuit against both companies. The state alleges that the companies are denying workers benefits by misclassifying them.
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