Dara Khosrowshahi, chief executive officer of Uber Technologies Inc., speaks during an interview in Tokyo, Japan, on Wednesday, July 3, 2019.
Akio | Bloomberg | Getty Images
Uber will lay off 3,700 employees, the company announced in a filing with the Securities and Exchange Commission Wednesday. The cuts to its customer support and recruiting teams represent about 14% of its 26,900 employees, based on Uber’s most recent headcount.
CEO Dara Khosrowshahi will also forgo his base salary for the rest of the year, according to the filing. In 2019, Khosrowshahi made $1 million in base salary but gained the vast majority of his compensation from bonuses an stock awards.
Uber’s stock was down about 2% during premarket trading.
Uber has been hit hard by the pandemic as travel has stalled during measures to stop the spread of the virus. Global gross bookings are down 80%, according to a report from The Information last month. Investors will get a greater sense of the impact on Thursday when Uber reports earnings.
Uber’s drivers have suffered from lost income, reigniting the debate around whether Uber should be able to classify them as contractors. Khosrowshahi advocated to President Donald Trump for a “third way” of classifying workers beyond contractors and employees, while pushing for gig workers to be eligible for stimulus relief. On Tuesday, California Attorney General Xavier Becerra and three city attorneys in the state announced a lawsuit against Uber and Lyft, alleging they denied workers benefits by misclassifying them.
Even as the company has considered cuts, it’s also reportedly been looking at investments for the future. Uber had been in talks to lead a $170 million investment in the electric scooter company Lime, according to The Information, valuing it at $510 million, a 79% drop from its previous valuation. Uber already owns a minority stake in Lime and has its own line of electric scooters and bikes called Jump. The proposed deal would transfer Jump to Lime and give Uber the option to buy Lime at a specified price between 2022 and 2024, according to the report.
This story is developing. Check back for updates.