Uber will lay off about 350 employees across Eats, rest of system
- Uber announced Monday it will lay off about 350 employees across its entire system, including Uber Eats, according to CNBC.
- This is the company’s third round of layoffs since August, with 835 previous job cuts to its engineering, product and marketing departments. The latest round of layoffs amount to approximately 1% of the company’s workforce, according to TechCrunch.
- In an email sent to employees, CEO Dara Khosrowshahi said this is the “last wave” of a process that began months ago, put into to place to “ensure we have the right people in the right roles in the right locations, and that we’re always holding ourselves accountable to top performance.”
This latest round of layoffs for Uber brings its total of cut staff to over 1,000 employees amid scrutiny over its inability to turn a profit. The company lost over $5 billion in the second quarter alone.
Uber’s multiple rounds of cuts indicate the need for a comprehensive restructure, but it isn’t the only delivery company to experience mass layoffs amid a restructure bid. Waitr laid off corporate employees over the summer, and Just Eat did the same in Ireland earlier this year.
And while most third-party aggregators are achieving solid revenue lifts, including Uber Eats, profit remains elusive across the entire space, even as demand and competition heat up. According to a recent Edison Trends report, DoorDash’s market share of delivery transactions grew from 27% to 35% during the first half of September, while Uber Eats slipped from 29% to 25% of spend and Grubhub fell from 30% to 22%.
Khosrowshahi told CNBC this summer that he does expect the company’s losses to subside in 2020, but does not expect profitability for Uber Eats as it grows. This is despite a number of initiatives, such as its successful loyalty program and its Olo partnership, as well as its user retention across both its Eats and ride-share program.
Wedbush Securities analyst Dan Ives told Fortune that this round of layoffs is an indicator of the pressure investors are putting on Uber to cut costs and reign in its massive losses. The company will report its Q3 earnings Nov. 4, which may shed some light as to whether or not these layoffs have done just that.