As the demand for rides suffers a huge downfall, Lyft will lay off 17% of its employees. That is around 982 employees who will not have a job. The company is trying cut costs by laying off employees. They are also cutting the pay for its employees in order to survive.
Logan Green, CEO, stated that economy will be affected all over the world due to the pandemic and that will impact the company. Besides this, he said that they are making a difficult decision and reducing the workforce. He said that they have to do this because they will come back in a strong position to achieve the company’s goals.
Lyft and Uber, both affected by COVID-19
Both companies have been rivals from the start. Uber has more reach than its smaller rival. Nonetheless, both companies have been suffering from huge losses due to the virus. The lockdowns happening in the United States are the main reason for the reduction in demand. Decrease in demand has also caused financial problems for the drivers.
Both companies have been quiet about their revenue status after the fall in demand. When the virus hit Seattle in the U.S., 60% of Uber’s demand reduced in the city, as stated by Dara Khosrowshahi.
Soon after that, the company saw the same thing happen in New York, L.A., and other big cities.
Uber and Lyft are going to release their financial reports for the first quarter of 2020. Besides this, Lyft will be cutting of the pays by 10%. These cuts will be deduced from every employee for the upcoming 3 months.
However, the executives and VPs will cut their salaries by 30% and 20%. Lyft also said that these layoffs will be very costly. They severance pay and other benefits will amount to around $28 million to $36 million.
According to a report by The Information, Uber will lay off around 5.400 employees. That is about 20% of the total workforce. Uber is trying to find ways to survive this pandemic as well to come back strong and fulfil their objectives.