Lyft (LYFT) - Get Report shares on Wednesday rose after the ride-hailing stalwart said it’s laying off 982, or 17%, of its workers and furloughed another 288, as it cuts costs during the coronavirus pandemic.
The scourge has kept many would-be travelers at home. And those who are willing to leave their homes may be reluctant to get into cars with strangers.
The workforce reductions come as part of Lyft’s efforts to “reduce operating expenses and adjust cash flows in light of the ongoing economic challenges resulting from the covid-19 pandemic and its impact on the company’s business,” Lyft said in a statement.
The 982 cuts are 17% of the San Francisco company’s employees. Lyft estimates the terminations will cost $28 million to $36 million in restructuring and related charges, primarily due to severance and benefits costs.
The majority of that hit will come in this year’s second quarter, the company estimates.
In addition to the layoffs and furloughs, Lyft for 12 weeks has cut base salaries for overtime-exempt employees: 30% for executive leadership, 20% for vice presidents and 10% for all other exempt employees.
Board members have agreed to forgo 30% of their cash compensation for the second quarter.
Lyft shares recently traded at $34.14, up 4.3%. The stock has declined 29% over the past three months, compared with a 10% slide for the S&P 500.
Shares of Uber, also San Francisco, were 5.3% higher at $31.71.