Uber Technologies reported a 2.4% increase in its shares during Wednesday morning trading, following the announcement of significant job cuts. The company plans to eliminate approximately 3,300 positions, which constitutes about 10% of its global workforce. This move is part of a broader restructuring initiative aimed at streamlining operations, reducing management layers, and cutting costs.
Uber said the restructuring will reduce the number of managers at the company by about 20%. Uber had about 34,000 employees worldwide at the end of last year, according to its annual report. The company last made bigger cuts in May 2020, when it laid off about 6,700 workers, or nearly one-fourth of its workforce.
The company will also reduce the number of employees who are seven or more reporting layers below the CEO, Reuters reported.
Some managers will be moved into individual contributor roles instead of being removed from the company, according to a company spokesperson cited by Bloomberg News. CEO Dara Khosrowshahi said Uber’s growth has created more management layers, more coordination and less clear ownership of work. He said some company structures that worked when Uber was smaller no longer make sense at its current size, according to an email obtained by Bloomberg News. Uber plans to reduce by nearly half the number of “micro-teams” with only one or two direct reports. However, Uber CEO Dara Khosrowshahi said the restructuring is mainly about simplifying the company, reducing extra layers of management and cutting jobs focused mostly on coordination. Khosrowshahi said the changes will generate savings for the company. Uber plans to use those savings to invest in areas that it believes will support future growth and innovation, according to Bloomberg News.
The layoffs will mainly target management roles. Uber wants to remove layers that have built up as the company grew. The company is also cutting down on small teams. Uber is combining several teams to make decisions faster. The company plans to streamline its core engineering, science and delivery groups. Uber will also combine its three operations teams focused on restaurants, retail and its white-label delivery service. These will be Uber’s biggest job cuts since the pandemic. Uber is not blaming AI for the job cuts. Some other tech companies have linked layoffs to artificial intelligence. Uber expects the restructuring to save money.
