Lyft plans next round of layoffs as part of cost-cutting

Move could help California-based company save 50 per cent of its costs, report says

In November, Lyft announced it would lay off 13 per cent of its staff amid rising costs and fears of recession. Reuters

Ride-sharing company Lyft is set to carry out another round of job cuts as it attempts to slash costs and restructure, it confirmed on Friday.

David Risher, a former Amazon and Microsoft executive who took over as Lyft's new chief executive this week, confirmed the layoffs in an email sent to employees on Friday.

“I am confirming that we will significantly reduce the size of the team as part of a restructuring … we need to be a faster, flatter company where everyone is closer to our riders and drivers so we can deliver on this purpose,” Mr Risher said in the email, seen by The National.

“We need to bring our costs down to deliver affordable rides, compelling earnings for drivers and profitable growth. We intend to use these savings to invest in competitive pricing, faster pickup times and better driver earnings.”

More details are expected to be revealed next week.

“This is a hard decision and one we’re not making lightly. But the result will be a far stronger, more competitive Lyft,” a representative told The National.

The company plans to cut about 1,200 jobs, affecting about 30 per cent of the company’s nearly 4,000 employees, The Wall Street Journal reported on Friday.

The move could help the California-based company save 50 per cent of its costs, it said.

Following the news, the company’s shares jumped 0.61 per cent to trade at $9.90 a share on Friday.

Its share price has dropped more than 70 per cent in the past year.

In November, Lyft announced that it would lay off 13 per cent of its staff, or nearly 700 employees, as it planned to rethink staffing amid rising costs and fears of a recession.

Last month, Lyft also announced a new leadership succession plan.

The company said its co-founders, chief executive Logan Green and president John Zimmer, had decided to transition from their full-time executive management positions into non-executive roles as chairman and vice chairman of the Lyft board, effective April 17 and June 30, respectively.

Lyft reported a net loss of $588.1 million in the fourth quarter of last year, compared to a net loss of $283.2 million in the fourth quarter of 2021.

Its revenue grew 21 per cent yearly to $1.2 billion in the October-December period.

Lyft also issued weak guidance for the first quarter of this year.

In February, the company said it expected to earn nearly $975 million in sales in the first quarter that ended on March 31. This was lower than the $1.09 billion estimated by analysts, according to StreetAccount.

Lyft is expected to announce first-quarter earnings on May 2.

After boosting hiring during the digital boom at the height of the Covid-19 pandemic, technology companies have been laying off workers amid declining earnings and growing fears of a recession in the US.

Microsoft, Alphabet, Facebook’s parent company Meta, Yahoo, Zoom and Spotify are among the companies that have cut thousands of jobs in recent months.