Ride-hailing platform Uber Technologies (hereafter Uber) is moving to a large-scale restructuring.
Bloomberg and the Los Angeles Times reported on the 2nd (local time) that Uber laid off 3,300 people, or 10% of its global workforce. It is the largest since the COVID-19 pandemic in 2020.
In-house managerial staff will be reduced by 20%, and some managers will move into hands-on roles. The number of employees who must go through more than seven layers of complex reporting from the chief executive officer (CEO) was also sharply reduced.
In addition, three teams that handled restaurants, retail, and branded delivery outsourcing were consolidated into one. Working from home will be allowed for only 1% of all employees.
Uber said the move is meant to address inefficiencies that arose as the business scaled up. CEO Dara Khosrowshahi said in an email to employees, "The purpose (of the layoffs) is to make Uber leaner and faster, creating the capacity to invest in our future."
Khosrowshahi said, "Over the past five years or so, Uber's revenue has nearly tripled and the company has grown in quantity. But such growth has brought complicated issues such as more layers (of reporting and approval), more coordination, and more fragmented responsibilities."
He added, "If the organization becomes leaner, accountability will be clearer and decision-making will be faster," and said, "Today's decision is not easy, but it will help build a stronger Uber in the years ahead."
Bloomberg analyzed that the restructuring suggests an intent to leverage artificial intelligence (AI) technology. According to an analysis by a Bloomberg Intelligence analyst, the layoffs will allow Uber to save about $1.5 billion to $2.0 billion a year (about 2.04 trillion won to 2.7 trillion won).