Uber Technologies (UBER) - Get Report said Wednesday that it will cut 3,700 jobs while waiving CEO Dara Khosrowshahi's annual salary, as it grapples with a plunge in ride traffic amid the coronavirus pandemic.
Uber said the job cuts, which equal around 14% of its payroll staff, would cost around $20 million, a figure that matches nearly all of its anticipated GAAP revenue for the first quarter and adds to the $2.2 billion first impairment charge it cautioned investors it would take late last month. Uber reports first-quarter earnings Thursday.
"Due to lower trip volumes in its Rides segment and the Company’s current hiring freeze, the Company is reducing its customer support and recruiting teams by approximately 3,700 full-time employee roles," Uber said in a filing to the Securities and Exchange Commission. "In connection with these actions, the Company estimates that it will incur approximately $20 million related to severance and other termination benefits. The Company is evaluating other costs and will provide an update in subsequent SEC disclosures regarding such amounts if material."
Uber shares were marked 0.9% lower in early trading Wednesday at $27.81 each, a move that would extend the stock's three-month decline to around 25%.
Late last month, Uber rival Lyft (LYFT) - Get Report said it would lay off nearly 1,000 employees, around 17% of its entire workforce while reducing salaries and cutting costs as lockdowns reduce ride traffic to near zero.
Yesterday, TheStreet reported California is suing Uber and Lyft for misclassifying their drivers as contractors rather than employees.