Lyft, the ride-hailing company that has been struggling to compete with its rival Uber, announced on Friday that it will be implementing significant job cuts. Approximately 1,200 employees are expected to be affected by the layoffs, which are scheduled for next week. This marks the first major move by David Risher, who recently took over as Lyft’s CEO, although his official start date was just this week.
In a note to employees, Mr. Risher stated, “We need to bring our costs down to deliver affordable rides, compelling earnings for drivers, and profitable growth.” He further explained that the savings from the downsizing would be reinvested in competitive pricing, faster pick-up times, and better driver earnings.
Employees will be notified of the job cuts on Thursday, and Lyft offices will be closed on that day. The news of the layoffs was reported earlier by The Wall Street Journal.
Lyft, which currently has around 4,000 employees, has long been in second place to Uber in the ride-hailing industry. Uber has emerged from the pandemic in a stronger position, thanks in part to its investments in food delivery and global ride-hailing services.
Lyft had previously laid off 13 percent of its staff in November, and in February, the company reported record revenue but warned of economic challenges ahead as it worked to lower prices. Mr. Risher has emphasized that maintaining competitive prices will be a key part of Lyft’s strategy to differentiate itself from Uber.
Employees at Lyft had been anticipating layoffs for some time, with business consultants brought in to assess budgets and make cost-cutting recommendations. Company executives had also been hinting at potential job cuts throughout the spring. Employees were expecting the layoffs to occur by mid-April, prior to the annual performance reviews and compensation decisions.