Lyft to release 13% of workforce in latest wave of job cuts

Technology

Lyft’s latest wave of job cuts will see the transportation company say goodbye to 13 percent of its staff, or around 700 employees. Lyft co-founders Logan Green and John Zimmer announced the cuts on Thursday in a memo issued to staffers that was seen by The Wall Street Journal. In it, the duo said they worked hard over the summer to bring down company costs by slowing – then freezing – hiring, cutting spending and pausing initiatives that weren’t viewed as critical.

Faced with a probable recession in the next year and rising rideshare insurance costs, the co-founders had no choice but to become leaner which required them to part with additional employees.

Lyft said it expects the layoffs to cost between $27 million to $32 million, which will show up on its fourth quarter earnings report.

It is the second wave of cuts in four months for the ridesharing service. Back in July, Lyft laid off around 60 employees. According to the Journal, Lyft has more than 5,000 employees on its payroll and that doesn’t include people that drive for the company.

Several tech-focused companies have slowed hiring or announced job cuts as of late. In July, NFT marketplace OpenSea trimmed a fifth of its workforce due to the “crypto winter.” A month later, Snap said it was parting ways with 20 percent of its staff and discontinuing products line Snap Originals and the Pixy pocket-sized drone with integrated camera to combat financial challenges.

Newly minted Twitter owner Elon Musk is reportedly set to lay off half of the platform’s workforce to reduce operating expenses. Earlier today, financial services provider Stripe Inc. said it was reducing the size of its team by 14 percent.

In many instances, we are seeing companies trim employees after overhiring during the pandemic.

Lyft shares are down less than one percent today on the news. Year to date, however, the stock has lost nearly 69 percent of its value and is currently trading just shy of $14.