Lyft is laying off 17% of its staff, the company announced Wednesday, after the coronavirus crisis wrought havoc on the ride-hailing business and cut substantially into its revenue.
The layoffs will amount to nearly 1,000 jobs. In an email to the company’s thousands of employees, chief executive Logan Green announced the “difficult news,” including the furloughing of 5% of the staff and reducing salaries for three months.
“The COVID crisis has taken an enormous toll on the entire world,” he wrote. “Our guiding principle for decision-making is to ensure we emerge from the crisis in the strongest possible position to achieve the company’s mission.”
Lyft, which went public a year ago on the promise of creating a one-stop-shop transportation app, said it made the decision in the best interest of its financial health.
“It is now clear that the COVID-19 crisis is going to have broad-reaching implications for the economy, which impacts our business,” Green said in a statement. “We have therefore made the difficult decision to reduce the size of our team. Our guiding principle for decision-making right now is to ensure we emerge from the crisis in the strongest possible position to achieve the company’s mission.”
Employees were receiving individual emails Wednesday morning to learn what would happen with their jobs. Lyft said in a financial filing that 982 employees would be affected. The company was set to hold a virtual all-staff meeting later Wednesday morning.
One email viewed by The Washington Post advised the laid off employee, “We regret that we have to deliver this news this way – but for the sake of clarity, I need to let you know that there’s no longer a role at Lyft for you.”
Lyft said pay cuts would be tiered so senior executives forgo 30% of their salary, vice-president-level employees give up 20% and other salaried employees see a 10% drop in pay.
Ride-hailing companies were already on shaky financial footing after going public last year, as their stock debuts increased pressure to trim costs and cut down on heavily subsidized financial incentives used to gain riders. In many cities, the coronavirus means residents sheltering in place couldn’t use the services at all unless they were conducting essential travel.
Uber also is considering how to respond to the crisis after the novel coronavirus has cut into ride-hailing by as much as 80% in some markets, the company told employees this week.
“As you would expect, the company is looking at every possible scenario to ensure we get to the other side of this crisis in a stronger position than ever,” Uber spokesman Noah Edwardsen said in a statement.