In defense of Uber leaving 435 workers – quartz at work
Uber, which is deep in redundancy mode after a long-awaited public offering that has not yet panicked so well, cut another 435 jobs today (September 10). It cuts 8% of employees in its engineering and product groups, on top of the 400 people who were laid off in July by the company's global marketing team.
It is tempting to see the news as a fair support for a company that undoubtedly grew too fast from the get go. The pursuit of that growth encouraged Uber's long history of flowing the rules, and of tolerating a toxic culture that Uber himself now sees as a risk to business.
But sell yourself in schadenfreude at your own risk. If you put aside morale by enjoying watching hundreds of people lose their jobs, you may want to consider for a moment the leadership conversation that led to these layoffs.
According to a statement Uber gave to TechCrunch, CEO Dara Khosrowshahi asked everyone on his management team whether they would recreate the branch organizations they have today if they were to design them from scratch. "After careful consideration," the statement reads, "our engineering and product development leaders concluded that the answer to this question was in many respects no."
the rapid hiring and decentralized decision that flourished when Uber graduated, at breakneck speed, from sluggish startup to global driving. Or you can give Khosrowshahi the credit he deserves for calling a timeout and encouraging his leadership team to question the status quo.
Of course, it is in Khosrowshahi's favor right now to show Wall Street that he has room to maneuver. Uber's shares are trading 25% below the stock market price in May at $ 45 – and that's almost the 4% pop the stock received today on the layoff news. (The shares, which closed today at $ 33.51, were trading below $ 31 earlier this month.) And, of course, Wall Street has a terrible history of cheering companies as they flip the workforce.
But Khosrowshahi is no Chainsaw Al. For a company with 27,000 full-time employees worldwide, 435 or even 835 positions, which are essential for those directly affected, are no indication of a scorched earth mentality. Rather, it appears that these cuts constitute a fine-tuning phase that has long been documented – not immediately – but eventually – when a new CEO takes over the board.
Khosrowshahi arrived at Uber just over two years ago with a long-standing and urgent list of priorities, including addressing a reputation crisis, a cultural rebuild and one of the most awaited IPOs this year. Terminations often signal problems ahead with associated blaring headlines. But that Khosrowshahi has moved on to questions about organizational structure can be read as a good sign for Uber. It indicates that he has moved out of fire-extinguishing mode – at least enough to spend some time lighting new ones under his leadership team – which in turn suggests that Uber is not bothered by these layoffs a bit. [19659009]
