Lyft’s new CEO David Risher has told employees that the company will be performing another round of layoffs next Thursday. According to The Wall Street Journal, this cut will affect 1,200 jobs or more, but the company has not disclosed a figure publicly. If the cut is this size, then that’s a 30% reduction in staff.
In his statement, Risher said that many employees already suspected more job cuts were on the way. He said he issued his statement to let people prepare for the outcome next week. He clarified that managers will not have any additional details until next Thursday, so employees are in limbo on the status of their jobs.
“Here’s why I’ve made this decision,” Risher writes in his statement. “As you’ve heard me say, great companies have purpose. 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.”
“We need to be a faster, flatter company where everyone is closer to our riders and drivers so we can deliver on this purpose,” he continued. “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 new Lyft CEO only assumed the role on April 17. He took over from co-founders Logan Green, who was CEO, and John Zimmer, who was President. Risher has a track record in the tech landscape. He was employee 37 at Amazon and the first head of product and head of US retail. He then became a general manager at Microsoft before starting a non-profit.
Risher said that he owns the decision to sack over one thousand employees and that those affected will get some support while they seek new employment or find some other way to make money.
The package of benefits includes 10 weeks of pay, with additional weeks for those with more than four years at Lyft. Healthcare coverage until October 31, including access to Modern Health. Accelerated equity vesting for the May 20 vesting date, and finally, access to career resources, including coaching sessions on resumes and interviews.
With this move, the company believes it can go on to become a customer-focused, large-scale, profitable business. The company’s share price rose 6.1% on Friday to $10.44 per share.
Interestingly, ARK Invest CEO Cathie Wood recently said that she expected Tesla stock to skyrocket by 2027 on the back of robotaxis. Companies like Uber and Lyft will definitely be looking to transition from human drivers to robotaxis as soon as legislation in different jurisdictions allows them to. The layoffs that Lyft are making now could be in anticipation of this automated future.
Source Lyft | Via The Wall Street Journal
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