Uber has laid off 435 employees across its product and engineering teams, the company announced today. Combined, the layoffs represent about 8% of organizations, with 170 people leaving the product team and 265 people leaving the engineering team.
The dismissals had no effect on Eats, which is one of Uber's top results and freight. , according to a source familiar with the situation.
Meanwhile, the company is lifting the hiring freeze on product and engineering teams that have been in power since early August, according to the source.
"Our hope with these changes is to reset and improve how we work day to day ̵[ads1]1; to recklessly prioritize and always hold ourselves accountable to a high bar of performance and agility," a Uber spokesman told TechCrunch. "Although painful at the moment, especially for those who are directly affected, we believe this will result in a much stronger technical organization, which in the future will employ some of the very best talents in the world."
more than 85% are based in the United States, 10% in Asia-Pacific and 5% in Europe, the Middle East and Africa, according to the source.
The layoffs came after Uber CEO Dara Khosrowshahi asked each member of his executive leadership team, should they start from scratch, their respective organizations would look like they do today.
"After careful consideration, our engineering and product managers concluded the answer to this question in many respects no," the spokesman said.
These leaders are Chief Product Officer Manik Gupta and CTO Thuan Pham. They looked at team size, identified duplicate roles and overlapping work, as well as individual performance to decide who would be laid off, the source said, so they landed on focusing more on the product and design teams from the product side.
"Previously, to meet the requirements for a hyper-growth start, employed we quickly and in a decentralized way, "the spokesperson said." While this has worked for Uber lately, now that we have over 27,000 full-time employees in cities around the world, we need to change how we design our organizations: lean, exceptionally high-performance team, with clear mandates and the ability to execute faster than our competitors. ”
These layoffs came shortly after Uber laid off 400 people from the marketing team. In Q2 2019, Uber lost more than $ 5 billion – the largest loss of revenue loss to date – although some of the losses were a result of stock-based compensation expenses for employees that followed the company's stock exchange listing in May. Although it may seem like these layoffs are in response to the quarterly losses, Uber says the talks have been going on.
When Uber laid off its W-2 employees, it also invested in ensuring that the 1099 independent contractors remain classified that way. In light of the giant bill for worker protection AB-5 that passed California legislation, Uber and Lyft and DoorDash put $ 30 million against a voting initiative in 2020 that would enable them to keep their drivers as independent contractors. If AB-5 passes, Uber will see a significant increase in costs.
Uber is currently trading at $ 33.14 per share, well below the $ 45 IPO pricing.
Here is Uber's full statement:
Our CEO has asked everyone in our leadership team a simple but important question: if we started from scratch, would we design our designs as they are today? After careful consideration, our engineering and product managers concluded that the answer to this question was in many respects no. Previously, in order to meet the requirements for a hyper-growth start, we employed quickly and in a decentralized way.
While this worked for Uber lately, now that we have over 27,000 full-time employees in cities around the world, we need to change how we design our organizations: lean, exceptionally high-performing teams, with clear mandates and the ability to execute faster than our competitors.
Today we are making some changes to get back on track, which includes reducing the size of some teams to make sure we are staffed properly against our top priorities. These were incredibly difficult conversations, as it means that some of our employees no longer have a role, specifically around 170 people in our product group and 265 people in engineering, which is about 8 percent of the two organizations.
Our hope with these changes is to reset and improve how we work day to day – recklessly prioritizing, and always holding ourselves accountable for high performance and agility. Although painful at the moment, especially for those who are directly affected, we believe this will result in a much stronger technical organization, which in the future will employ some of the very best talents in the world.