Ride hailing company Uber is announcing a significant reduction in its workforce today.
Uber will be laying off 3,700 employees, and the company’s CEO will forgo receiving his base salary for the remainder of the year. The layoffs account for about 14 percent of Uber’s workforce, apart from its drivers.
According to CNBC, the move was first announced in a filing with the Securities and Exchange Commission dated May 2. The layoffs are the company’s latest attempt at dealing with a massive dropoff in ridership due to the coronavirus pandemic.
And Uber is not alone. Last month the company’s chief competitor, Lyft, laid off nearly 1,000 employees. That’s about 17 percent of its non-driving workforce. And just yesterday AirBnB announced that it will be laying off a full 25 percent of its employees.
Uber’s announcement comes one day after California Attorney General Xavier Becerra filed a lawsuit alleging that both Uber and Lyft are not complying with AB5. That’s the law that went into effect this year re-classifying many gig workers as employees instead of independent contractors. Uber has pledged to challenge Becerra’s action in court.
Uber is scheduled to report its earnings for the first quarter of 2020 tomorrow. The company’s CEO has said that employees can expect a further and final update on cost restructuring in the next two weeks.