Ride-hailing company Lyft plans to “significantly reduce” its workforce as it faces difficulty in generating a profit, according to David Risher, the company’s new CEO.
What’s happening: The Wall Street Journal claimed that this round of layoffs will result in permanent layoffs for around 1,200 employees.
- This represents approximately 30% of its entire workforce, a number that Lyft has not yet confirmed.
- Risher sent a memo to staff on April 21 explaining that the cuts are designed to make Lyft a “faster, flatter company where everyone is closer to our riders and drivers.”
- “I own this decision and I understand that it comes at an enormous cost.”
- A Lyft spokesperson said that “the result will be a far stronger, more competitive Lyft.”
Further explanation: The layoffs come as Lyft faces ongoing challenges related to the economy and stiff competition.
- Lyft previously let 60 employees go in July 2022, and cut as many as 700 jobs in November 2022.
- The company hasn’t kept up with Uber’s efforts to diversify its business by expanding into meal and grocery delivery. Uber’s most recent earnings report marks its strongest quarter ever.
- Lyft’s shares are down roughly 70 per cent from this time last year.
- Risher was made CEO in April following the departure of co-founders Logan Green and John Zimmer. Risher was a longtime senior employee at Amazon who was originally hired as the company’s 37th employee.
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