Uber Technologies is set to reduce its global corporate workforce by about 10 per cent, affecting approximately 3,300 of its 34,000 employees in what is the company’s largest round of layoffs since the COVID-19 pandemic.
The ride-hailing giant announced the restructuring on September 2, with Chief Executive Officer Dara Khosrowshahi telling employees that the changes are intended to streamline the company and create room for future investments.
According to Khosrowshahi, the restructuring is “designed to do two things: make Uber simpler and faster and create more capacity to invest in our future.”
A major focus of the changes will be reducing layers of management within the organisation. Uber plans to cut the number of teams with only one or two direct reports by roughly half, while staffing more than seven reporting levels below the CEO will be reduced by 20 per cent.
The company is also planning to bring together its engineering, science and delivery divisions as part of the restructuring.
Uber intends to concentrate more employees in major hubs, including New York and San Francisco. Under the new arrangement, only about one per cent of its workforce will be allowed to continue working remotely.
Unlike some recent technology industry layoffs, Khosrowshahi did not point to artificial intelligence as a reason for the job cuts.
Uber said the restructuring is aimed at freeing up resources for its major long-term priorities rather than responding to weakening demand.
The company has previously announced plans to invest more than $10bn in autonomous vehicles over the coming years, and part of the savings generated by the restructuring is expected to support that strategy.
The move comes as Uber continues to report strong financial performance. Its gross bookings reached $58bn in the second quarter, representing a 22 per cent increase from the same period a year earlier and marking the fourth consecutive quarter in which growth exceeded 20 per cent.
Uber’s trailing 12-month free cash flow also surpassed $10bn for the first time, while adjusted EBITDA climbed 33 per cent to $2.8bn.
The company’s shares recorded a modest rise following news of the restructuring but have remained down by roughly 8 to 12 per cent so far this year, trailing the broader Nasdaq market.
One of the major concerns surrounding Uber is its position in the rapidly developing autonomous ride-hailing market, particularly its competition with Alphabet’s Waymo.
Reports that Waymo could seek to end its partnership with Uber have added to those concerns, as the two companies increasingly compete in the autonomous vehicle space.
A potential breakdown in the relationship could create additional challenges for Uber as it commits billions of dollars to developing its autonomous vehicle strategy.
Despite those concerns, Uber is positioning the workforce reduction as part of a broader effort to make the company more efficient and redirect capital towards future growth.
By reducing management layers, consolidating divisions and cutting organisational complexity, the company expects to make decisions more quickly while lowering costs across its operations.
The restructuring will affect Uber’s corporate workforce rather than its core network of drivers and other frontline operations, allowing the company to maintain its existing mobility and delivery businesses while focusing greater resources on autonomous vehicles and other growth areas.
