Major downsizing at Uber due to lockdown

Downsizing at Uber

Uber takes a major hit amid COVID-19 crisis. The ride hailing giant gets ready to cut off 3,700 of its full time staff, which makes about 14% of its workforce. Including the base salary of the CEO Dara Khosrowshahi will also be waived off.
 
Uber says $20m would be paid to compensate employees’ and to cover other costs.
 
Due to Covid-19 there had been an increase in Uber Eats food delivery service whereas there had been a drop in demand for its taxi services by more than 60%. In a statement the firm said, “We are trying to cut down the costs keeping in mind the size of our business today, as we don’t know how long the recovery will take.”
 
The payrolls processor ADP reported that 20.2 million employees has been laid off by the private employers in the US last month which is double the number of jobs lost in the 2008 financial crises.

Other ride hailing apps such as Lyft will also lay off almost 1,000 employees, which is about 17% of its workforce.
 
This week Uber and Lyft faced a legal action by the government of California because of changing the designation of drivers as independent contractors, which means the firms do not have to pay the drivers in paid sick leaves and provide other benefits. By doing so this could potentially increase the costs by 30%.

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