Uber plans to lay off about 20% of the company's employees, based on a report by The Information. The reason is lower demand amidst the coronavirus pandemic.
Executives at Uber are mulling over letting go of 20% of its workers. The coronavirus pandemic hit the ride sharing company. There were fewer customers booking rides due to the implementation of social distancing guidelines.
Meanwhile, Uber Eats, the company's food delivery arm, reportedly recorded an increase in the food delivery business.
According to The Information, the layoff that Uber is eyeing "could result in more than 5,400 of Uber’s 27,000 employees losing their jobs."
Uber told USA Today: "The company is looking at every possible scenario to ensure we get to the other side of this crisis in a stronger position than ever."
The report also takes place as the company announced the resignation of its chief technology officer, Thuan Pham. Uber announced Pham's departure in a filing with the Securities and Exchange Commission.
"While the work is never done, I feel comfortable hanging up my hat at a time when the Uber Engineering team is at peak productivity. We have built robust system scale and stability, and are well prepared to face the future," Pham was quoted saying.
Pham joined Uber in 2013.
Forecasts
Uber said earlier this month that it would withdraw its forecasts for some revenue and earnings metrics for 2020.
"It is impossible to predict with precision the pandemic’s cumulative impact on our future financial results," the company said in a press release on April 16.
"To support those whose earning opportunities have been depressed as a result of COVID-19, as well as communities hit hard by the virus, we announced and implemented several initiatives during the first quarter of 2020, including a financial assistance program for drivers and delivery people," the company notes.
"We intend to account for this program as Contra Revenue, which we expect will reduce GAAP Revenue by an estimated $17 to $22 million in Q1 and an estimated $60 to $80 million in Q2," the press release reads.
"...we expect to record an impairment charge against the carrying value of some of our minority equity investments. We believe these investments will be reduced by an estimated range of $1.9 to $2.2 billion during the three months ended March 31, 2020," Uber states.
Competitors
Meanwhile, food delivery company and competitor GrubHub also withdrew its "full year 2020 revenue and EBITDA guidance" two weeks ago. It mentioned the impact of the coronavirus pandemic on the company's operations.
Lyft taps more of its drivers to respond to delivery needs. The company launched the initiative called Essential Deliveries. People can avail this in 11 cities, including Atlanta, Dallas and Seattle.
The company saw a "huge need in terms of delivery" and "an opportunity to provide new earning opportunities for Lyft drivers and also make an impact by delving into the delivery space," Lisa Boyd, director of social impact at Lyft, told CNN Business.
