Uber to cut 3,700 jobs as lockdowns hit its ride-hailing business

Ride hailing giant says reduction in recruitment and customer support roles is part of a drive to reduce operating expenses

Uber chief executive Dara Khosrowshahi has agreed to forgo his basic salary for the rest of this year. Reuters

Ride hailing giant Uber Technologies said on Wednesday it will cut 3,700 jobs and its chief executive, Dara Khosrowshahi, will forgo his salary for the remainder of this year.

"Due to lower trip volumes in its rides segment and the company’s current hiring freeze, [Uber] is reducing its customer support and recruiting teams by approximately 3,700 full-time employee roles," the company said in a filing to markets.

"In connection with these actions, the company estimates that it will incur approximately $20 million (Dh73.4m) related to severance and other termination benefits," it added.

Uber has been hit hard by a decline in its ride-hailing business during the pandemic as stay-at-home orders meant people cut down their travel.

The company, which floated on the Nasdaq exchange 12 months ago, also said it is "evaluating other cost[s]" as it attempts to drive down its operating expenses.

Uber declared losses of  $8.5 billion on revenue of $14.1bn in its first year as a public company.

Over the years, it has pursued a strategy of acquiring rivals in competitive markets and pulling back from direct operations.

In line with such a strategy, the company completed its acquisition of Dubai-based ride hailing competitor Careem in a $3.1bn deal in January.

Careem announced its own plan to reduce headcount earlier this week. It cut more than 30 per cent of roles, with chief executive Mudassir Sheikha saying its core ride-hailing business had fallen by as much as 90 per cent and its delivery business by 60 per cent in some of markets.

Earlier this week, Uber Eats also said it would stop operating in the UAE and Saudi Arabia and transfer its existing customers to Careem Now - the food delivery arm of Careem.