Lyft, which has struggled financially as it tries to compete with rival Uber, said Friday it is planning major layoffs.
The layoffs are expected to affect about 1,200 people next week, according to a person familiar with the matter. It’s the first big move for the company’s new chief executive, David Risher. Mr. Risher has been considering layoffs for several weeks, the person said, even though his first official working day as the company’s chief executive was on Monday.
“We need to reduce costs to provide affordable rides and attract drivers’ revenue and earnings growth,” Rischer said in a note to employees. He added that the money saved from the layoffs will be used to “invest in competitive pricing, faster pickup times and better driver earnings.”
If employees lose their jobs, they will be notified next Thursday and Lyft offices will be closed that day, Mr. Risher said.
News of the layoffs at Lyft, which has about 4,000 employees, was reported earlier. wall street journal.
“This is a difficult decision, and one we don’t take lightly,” Lyft spokeswoman Sona Iliffe-Moon said in a statement. “But the result will be a stronger, more competitive Lyft.”
Lyft announced in March that Risher, a former Amazon and Microsoft executive who served on Lyft’s board of directors, would succeed company founders John Zimmer and Logan Green. Both will leave their executive positions but remain with the company as board members.
Lyft has long lagged far behind Uber, which has emerged from the pandemic in a better position, in part because of its investments in food delivery and global ride-hailing businesses.
In November, Lyft laid off 13% of its workforce. In February, the company reported record revenue but warned that economic challenges would slow revenue growth as it works to bring prices down. Mr. Risher said keeping prices competitive would be a key part of his strategy to differentiate Lyft from Uber.
Lyft employees have been expecting layoffs for months. Business consultants have been hired to ask the department to justify its budget and propose cost-cutting proposals, three current and former employees said, and company executives have been signaling throughout the spring that more workers may lose their jobs.
Staff expect the layoffs to take place by mid-April, after which managers will write their annual performance review and executives must decide on pay for the year.
