Uber to lay off 3,700 employees, about 14% of its entire workforce

Yesterday, we told you about a lawsuit from the state of California accusing the Uber and Lyft  for misclassifying workers. Now, it seems Uber has a much bigger problem and things are not really getting better for the ride-hailing giant. Uber announced Wednesday in a filing with the Securities and Exchange Commission (SEC) that it will lay off 3,700 employees.

The ride-hailing giant also said that CEO Dara Khosrowshahi will forgo his base salary for the rest of the year. Khosrowshahi made $1 million in base salary in 2019 but gained the vast majority of his compensation from bonuses and stock awards. The current layoffs to its customer support and recruiting teams is about 14% of its 26,900 employees, based on Uber’s most recent headcount.

Uber has been plagued with problems even before its Co-founder and former CEO Travis Kalanick left the company late last year. In the third quarter of 2019, Uber reported a net loss of over $1 billion in 3 months. Even though the ride-sharing company’s earnings of $3.81 billion beat analyst estimates of $3.69 billion, the devil is in the detail. During the same period, Uber reported a net loss of $1.16 billion for the quarter, topping its $986 million loss during the same quarter of 2018.

Founded in 2009 by Garrett Camp, Oscar Salazar, and Travis Kalanick, Uber develops, markets, and operates a ride-sharing mobile application which allows consumers to submit a trip request that is routed to crowd-sourced partner drivers. Its smartphone application connects drivers with people who need a ride. Its application enables users to arrange and schedule transportation and/or logistics services with third-party providers.