Lyft to make ‘significant’ cuts across ride-hailing company
Lyft’s newly appointed CEO David Risher told employees in an email Friday that the company is significantly reducing its workforce as part of a restructuring effort.
Risher said the restructuring is part of Lyft’s plan to “better meeting the needs of riders and drivers.” The company confirmed that it has not changed its guidance for the first quarter in spite of the upcoming layoffs.
What’s less clear is how this might affect programs outside of ride-hailing such as its bike-sharing service.
Lyft doesn’t employ drivers who use the ride-hailing app to pick up and drop off riders. Instead, the layoffs will be directed at the company’s more than 4,000 full-time employees. Employees will learn whether they have a job or not via an email that will be sent out April 27.
Lyft wouldn’t disclose the number of people who will be cut. A WSJ report, citing unnamed sources, said about 1,200 workers, 30% of its total workforce, would be affected.
Risher, a former retail executive at Amazon, took over the CEO position at Lyft after co-founders Logan Green and John Zimmer stepped down last month.
Risher explained in the email that he made the decision to help the company achieve its two core purposes.
“Lyft has two purposes that are linked to each other: We help riders get out and about so they can live their lives together, and we provide drivers a way to work that gives them control over their time and money,” he wrote.
“We need to be a faster, flatter company where everyone is closer to our riders and drivers so we can deliver on this purpose,” And we need to bring our costs down to deliver affordable rides, compelling earnings for drivers, and profitable growth. We intend to use these savings to invest in competitive pricing, faster pick-up times, and better driver earnings. All of these require us to reduce our size and restructure how we’re organized.
The move may come as no surprise to those who closely follow Lyft and its struggles to keep apace of rival Uber.
Risher told TechCrunch in a late March interview that Lyft might drop its shared rides offering and make other changes to its business model in a bid to focus on its core ride-hailing business and become profitable.
He listed a number of other products and services that could disappear, including Wait & Save, which allows riders in certain regions to pay a lower fare if they wait for the best-located driver.
“It’s possible that maybe we don’t need both of those anymore and that we can focus all our resources on doing a fewer number of things better,” Risher told TechCrunch at the time. “Maybe it’s time for us to say the shared rides were great for a time, but it’s time to let that go.