lyft lays off more than 1,000 workers to cut costs
As one of the first moves under the leadership of new CEO David Risher, ride-hailing company Lyft Inc (NASDAQ:LYFT) announced it will let go of approximately 1,072 employees, or 26% of its workforce. This news caused its shares to rise by about 1% on Thursday.
The company will “significantly” cut jobs, according to Risher, who assumed leadership earlier this month, without specifying how many jobs would be affected.
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According to a filing with the exchange, Lyft will also cut more than 250 open positions and spend between $41 million and $47 million on severance and employee benefits in the second quarter.
Separately, Lyft announced that it would split its rideshare business into three main teams and reduce its three levels of management from 8 to 5.
It will also incur additional expenses for stock-based compensation that, according to the statement, are not currently estimable.
Lyft announced that it will support “service-level improvements” for customers and drivers with the money saved from job cuts, and it promised to provide more information during its first-quarter earnings call on May 4.
This is Lyft’s second round of job cuts.
In a slowing economy, Lyft faces competition from larger rival Uber Technologies (NYSE:UBER) Inc. In November, it had fired 683 workers, or 13% of its total workforce.
Investors are concerned that Lyft’s price reductions to avoid coming in a distant second in the North American ride-sharing market would squeeze its profit as the two companies compete for market share after hitting pandemic lows.
In contrast to Uber’s 20% gain, Lyft’s stock gained 1.5% on Thursday but has lost 8.8% of its value so far this year.