Shares of Uber (UBER) - Get Report fell Monday after the ride-hailing giant announced it was shuttering its Uber Eats business in the Czech Republic, Egypt, Honduras, Romania, Saudi Arabia, Uruguay and Ukraine by June 4.
The company also said it would be transferring its Uber Eats business in the United Arab Emirates to Careem, its wholly-owned subsidiary operating primarily in the Middle East.
“These decisions were made as part of Uber’s ongoing strategy to be in first or second position in all Eats markets by leaning into investment in some countries while exiting others,” the company said in a Securities and Exchange Commission filing.
The discontinued and transferred operations represent 1% of Eats’ gross bookings and 4% of Eats’ adjusted EBITDA losses in the first quarter of 2020.
“Consistent with our stated strategy, we will look to reinvest these savings in priority markets where we expect a better return on investment,” Uber said.
Uber’s action “should be a positive signal to investors that the company is heading in the right direction here," Bernstein analyst Mark Shmulik wrote in a report.
He believes "this is likely only Round 1 of ongoing efforts," with additional restructuring possible in Europe or Latin America.
Uber executives are considering laying off about 20% of the company’s 20,000 workers, The Information reported last week.
The coronavirus has hammered the company as would-be riders are reluctant to get into a car with a stranger.
Uber shares recently traded at $27.81, down 2.04%. The stock has dropped 26% in the last three months, compared with a 13% slide for the S&P 500.