Lyft Will Lay Off About 1,200 People as It Looks to Cut Costs
Lyft, which has struggled financially while trying to compete with its rival, Uber, said on Friday that it was planning major job cuts.
The layoffs, which are expected next week, will affect about 1,200 people, according to a person with knowledge of the situation. It is the first significant move by David Risher, the company’s new chief executive. Mr. Risher had been considering the cuts for several weeks, the person said, even though his first official day as the company’s C.E.O. was on Monday.
“We need to bring our costs down to deliver affordable rides, compelling earnings for drivers and profitable growth,” Mr. Risher said in a note to employees. He added that money saved from the downsizing would be used to “invest in competitive pricing, faster pick-up times and better driver earnings.”
Mr. Risher said that employees would be notified next Thursday if they had lost their jobs, and that Lyft offices would be closed that day.
News of the job cuts at Lyft, which has about 4,000 employees, was reported earlier by The Wall Street Journal.
“This is a hard decision, and one we’re not making lightly,” Sona Iliffe-Moon, a Lyft spokeswoman, said in a statement. “But the result will be a far stronger, more competitive Lyft.”
Lyft announced in March that Mr. Risher, a former Amazon and Microsoft executive who served on Lyft’s board, would take over for John Zimmer and Logan Green, the company’s founders. Both men are leaving their executive positions but staying at the company as members of the board.
Lyft has long been a distant second to Uber, which has emerged from the pandemic in a stronger position, partly because of its investment in food delivery and a global ride-hailing business.
In November, Lyft laid off 13 percent of its staff. In February, the company reported record revenue but warned it would be slowed by economic challenges as it worked to lower prices. Mr. Risher has said that keeping prices competitive will be a key part of his strategy to differentiate Lyft from Uber.
Lyft employees had been anticipating layoffs for months. Business consultants had been brought in to ask departments to justify their budgets and make cost-cutting recommendations, three current and former employees said, and company executives had been hinting throughout the spring that more workers could lose their jobs.
Employees expected the layoffs to come by mid-April, before managers were scheduled to write yearly performance reviews and executives had to decide on compensation for the year.