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Ride-hailing group to eliminate 3,300 jobs as competition rises in food delivery sector and robotaxi race intensifies
Ride-hailing group to eliminate 3,300 jobs as competition rises in food delivery sector and robotaxi race intensifies A Nuro robotaxi drives along the Embarcadero in San Francisco, California.
Nuro robotaxis are partnered with Uber and Lucid and were seen testing in San Francisco in August. Photograph: Heather Diehl/Getty Imagesplans to cut 3,300 jobs in its most sweeping lay-offs since the coronavirus pandemic, as the ride-hailing pioneer axes management roles and ploughs billions of dollars into its robotaxi business.
Chief executive Dara Khosrowshahi said the cuts, which represent about 10 per cent of Uber’s corporate workforce, would reduce “complexity” across the business and generate the savings needed to pay for its investments. The move comes as Uber faces intensifying competition from robotaxi groups such as Alphabet’s Waymo, as well as hurdles in its food delivery business. The group’s shares have fallen 7 per cent this year.
Analysts at Citi said the cuts would generate roughly $825 million in annual savings, with the group expected to funnel more money towards initiatives including the deployment of robotaxis.
“This action is likely enabled, at least in part, by greater efficiencies from Uber’s AI investments,” noted Ronald Josey, an analyst at the bank. Sherry FitzGerald owner eyes 52% profit from sale of Dublin retail park to German fundThe reduction in its workforce comes as Uber has pledged to spend more than $10 billion to expand its robotaxi network, betting that its more than 200 million customers will give it an edge in the intensifying race to commercialise autonomous vehicles.
Uber plans to operate robotaxi services in at least 15 cities this year, as it competes with Waymo and Elon Musk’sWhile Uber Eats has gained market share in the UK, France and Germany, it has lost ground in the US to DoorDash, which has widened its market share to about 64 per cent, its highest level since the end of the Covid-19 crisis. Uber, by comparison, has a 31 per cent share of the US market, according to YipitData.
Andrew Macdonald, Uber’s president, is overseeing the group’s food delivery business on an interim basis following the recent departure of Susan Anderson, who helmed the division for little more than a year before leaving in June. He is working to restructure the organisation with the company already combining operational teams across its courier, restaurant and retail businesses. The company is in the process of recruiting a new global head of delivery and a head of commercial.
Khosrowshahi wrote to staff saying that the company’s explosive growth in recent years had led to “complexity: more layers, more co-ordination, more fragmented ownership, and in some cases structures that made sense when businesses were smaller but no longer serve us well at our current scale”. Uber said it would reduce the number of managers across its workforce by 20 per cent, eliminating hundreds of roles and removing direct reports from others.
A spokesperson said the lay-offs were “pretty proportional” across the company’s varying seniority levels. Khosrowshahi said Uber would halve the number of “micro teams” with one or two members and cut the number of staff who sat seven or more layers below him in the company’s organisational chart. Uber is also asking most staff to work from an office, curbing the number of employees allowed to work remotely to only about 1 per cent of its workforce.
The San Francisco-based company will also “reinforce compliance” with its hybrid working policy, which requires staff to work in the office three days a week. Last month, Uber said its UK partner, Wayve, had received permits from Transport for London to launch a commercial robotaxi service with a supervising driver behind the wheel. Uber is also preparing to integrate Berlin-based food delivery group Delivery Hero after agreeing to acquire the group in a €13 billion deal in July.
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