Uber lays off 3,300 employees,10% of workforce, in biggest job cuts since 2020 as robotaxi competition intensifies

Uber is cutting about 3,300 employees, roughly 10% of its global workforce, in its largest round of layoffs since the pandemic. This time, a collapse in ride demand isn’t driving the cuts. Uber is slimming down as CEO Dara Khosrowshahi prepares the company for a future in which more of the cars competing for passengers may have nobody behind the wheel.

“Today, we’re making a number of significant organizational changes across Uber. We are removing layers, simplifying team structures, refining our global location strategy, and focusing our people and investments against the biggest opportunities ahead of us. As a result, we will be reducing the size of our team by about 10%. Everyone whose role has been affected has already been notified, except in countries where we will follow the required local process,” Uber said in a news release.

The restructuring will eliminate management layers, combine teams and pull more employees into major office hubs. Uber will also sharply reduce fully remote positions, limiting them to about 1% of its workforce and maintaining its three-day office policy.

Uber has notified affected employees, except in countries where local employment laws require a different process.

Khosrowshahi framed the overhaul as an attempt to undo some of the organizational structure accumulated during years of growth.

“A leaner organization will mean clearer ownership, faster decisions, and more time spent building rather than coordinating. It will also generate savings that we intend to reinvest in growth, innovation, and the capabilities that will matter most over the coming years,” Khosrowshahi said in a note to employees Wednesday.

Unlike many recent tech layoffs, Khosrowshahi did not blame artificial intelligence for the reductions. Layoffs.fyi has tracked more than 123,000 tech job cuts across nearly 390 companies this year, with AI and automation frequently cited as companies rethink staffing, Reuters reported.

Uber’s problem is different. The company has built one of the largest ride-hailing networks on the planet around human drivers. Autonomous vehicles could change the economics behind that network.

Uber prepares for a robotaxi fight

Waymo, Uber’s partner and potential long-term rival, sits at the center of that threat.

The Alphabet-owned autonomous driving company offers rides through Uber in Austin and Atlanta, yet Waymo has been entering other markets independently. Tesla is pursuing its own robotaxi ambitions, creating another potential challenge to Uber’s role connecting passengers with vehicles.

Uber’s answer is not to build every piece of autonomous driving technology itself. The company plans to invest more than $10 billion in robotaxis over the coming years, backing autonomous vehicle companies and positioning the Uber app as a marketplace where consumers can summon driverless rides from multiple operators.

That strategy creates an unusual relationship with the companies building autonomous vehicles. They can be Uber partners in one city and potential competitors in another.

“As AV tech and relationships grow and expand – there is a different type of employee needed to scale that business than one built around human drivers and all the cost to serve entailed with that, including management layers,” Adam Ballantyne, an analyst at Uber shareholder Cambiar Investors, said.

Uber’s restructuring gives a clearer picture of how deep the changes could run.

The company plans to reduce by 20% the number of employees sitting seven or more reporting layers below Khosrowshahi. Teams with managers overseeing only one or two direct reports will be cut nearly in half. Some groups will be consolidated, with more employees concentrated around key hubs.

Uber had about 34,000 employees worldwide at the end of last year, according to its annual report.

The 3,300 layoffs are its largest since May 2020, when the COVID-19 pandemic devastated ride-hailing demand, and Uber eliminated about 6,700 jobs, nearly a quarter of its workforce.

This time, there is no comparable demand shock. Uber is restructuring from a position where management says the core business remains healthy, making these cuts less about surviving the present and more about preparing for what comes next.

Investors have been watching that transition closely. Uber shares have fallen nearly 8% this year, trailing the S&P 500 and rival Lyft amid concerns that autonomous vehicles could weaken its position in ride-hailing. Shares rose more than 2% in premarket trading after the restructuring news.

The bigger question is no longer whether robotaxis will appear on Uber’s platform. They already have.

The question is whether Uber can remain the platform riders open first once the driver is no longer part of the equation.