Uber and Lyft experienced separate staff shake-ups on Monday as Uber announced it will lay off 400 of its 1,200-member global marketing staff, and Lyft’s chief operating officer is leaving the company after 18 months on the job. Lyft will not hire a replacement.
The nation’s two leading ride-sharing companies have had bumpy rides, with heavy losses and dropping stock prices since going public; Uber made its Wall Street debut on May 10 and Lyft on March 29. Ride-hailing is an expensive business, requiring the companies to spend significant cash on recruiting and subsidizing the rides.
Uber’s layoffs are part of an effort to cut costs and streamline operations following its IPO and $1 billion first-quarter loss. The cuts will take place in the company’s offices globally. Nearly half of Uber’s 25,000-person global workforce is based in the United States.
“Many of our teams are too big, which creates overlapping work, makes for unclear decision owners, and can lead to mediocre results,” Uber CEO Dara Khosrowshahi wrote in an email. “As a company, we can do more to keep the bar high and expect more of ourselves and each other. Put simply, we need to get our edge back.”
Uber has a history of steep losses, and its revenue growth is slowing. The company has struggled to prove it can become profitable and its stock has traded mostly below its IPO price of $45; the shares were down 7.6% on the first day of trading.
Uber’s announcement follows a shake-up in leadership in June, when CEO Dara Khosrowshahi consolidated the company’s marketing, communications, and policy teams.
Lyft has also been experiencing growing pains since going public, posting a big loss in its first quarter as a publicly traded company.
Four months after Lyft’s initial public offering, COO Jon McNeill is stepping down from his role. McNeill joined Lyft in February 2018 from Tesla, where he served as the president of global sales and service.
In an email to staff, Lyft founders Logan Green and John Zimmerman said they will reassign McNeill’s responsibilities to other executives.
After a strong first day of trading in March, Lyft’s market value dropped from $22.2 billion to the current value of $18.6 billion.
On Tuesday afternoon, Uber was trading at $42.63, down $1.25 or 2.85%. The shares opened at $43.71, with a high of $43.74 and a low of $42.55.
Lyft was trading on Tuesday at $62.39, down $1.64 or 2.56%, it opened at $63.80, with a high of $63.94 and a low of $62.11.
Smith Collection/Gado/Getty Images