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Uber sacks 3,700 staff after economy slump

By Temitope Akintoye,

Foremost ride-hailing company, Uber, has sacked about 3,700 of its staff globally, following a sharp reduction in income due to coronavirus lockdown implementations in several countries across the world.

It disclosed that the decision to cut over 14 percent of its global workforce was painful but necessary, saying that the company earnings had taken a sharp decline following rising incidence of coronavirus around the world.

The company revealed that its Chief Executive Officer, Dara Khosrowshahi, would also waive his basic salary for the rest of the year and hinted that major operational changes would be implemented as time went on.

Uber made the announcement during its regulatory filing on Wednesday and explained that the 3,700 affected staff, however, did not include contract drivers registered on its franchise platform.

The Deputy Research Manager on Equities Management, Wedbush Securities, Daniel Ives, stated that the cost-cutting move had come barely hours ahead of the company’s earnings report presentation and expressed expectations that Uber would need to cut additional costs in order to regain a profitable business model.

“Today’s cost-cutting move ahead of tomorrow’s earnings is a painful, but unfortunately a necessary, move for Dara & co. to make in this unprecedented COVID-19 environment,”

“On the other side of this dark valley, the Uber business model will likely look a lot different for the next few years (at least) and the company must rationalize costs and a smaller operation to focus on attaining profitability in this ‘new normal’ backdrop”.

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