Coronavirus: Uber announces drastic cuts to secure its future – BBC News

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Uber has introduced a drastic motion plan to cut back its enterprise as its losses balloon amid pandemic lockdowns.

The agency mentioned it could lower 3,000 extra jobs, bringing the entire reductions in current weeks to 1 / 4 of the workforce.

It is usually closing or consolidating greater than 40 places of work and winding down items comparable to its synthetic intelligence lab.

The top of the agency mentioned the strikes have been crucial “to safe our future”.

“We should set up ourselves as a self-sustaining enterprise that now not depends on new capital or traders to continue to grow, increasing and innovating,” chief government Dara Khosrowshahi wrote in a letter to employees.

“We’ve got to take these exhausting actions to face sturdy on our personal two ft, to safe our future and to proceed on our mission.”

80% drop

Even earlier than the pandemic, Uber was grappling with enormous losses. However its challenges have multiplied as exercise plunges through the pandemic.

The variety of Uber rides dropped 80% final month on the top of the lockdowns within the US and Canada. In the meantime, though its Uber Eats meals supply enterprise has surged, it stays loss-making.

Earlier this month, Uber introduced it could lower 3,700 employees and warned of doable further reductions. The workforce cuts don’t embrace drivers, whom Uber considers impartial contractors.

The affected places of work embrace hubs in San Francisco and in Singapore, which can begin closing over the following yr because the agency selects a brand new regional headquarters.

Uber mentioned it could reorganise its remaining employees and reduce spending in areas that aren’t a part of its core private transport or meals supply companies, together with its AI Labs.

Mixed, the actions ought to cut back spending by $1bn, the corporate mentioned.

Wider affect

Uber’s actions are the most recent signal of the continuing financial affect of the virus and efforts to regulate it.

Whereas some locations have began to ease restrictions, many firms – particularly these within the journey business – have warned it is going to take time for public confidence within the security of many on a regular basis actions to be restored.

Uber’s smaller rival, Lyft, has additionally introduced vital job cuts, as have airways, hoteliers and reserving platforms comparable to Airbnb.

“Given the dramatic affect of the pandemic, and the unpredictable nature of any eventual restoration, we’re concentrating our efforts on our core mobility and supply platforms and resizing our firm to match the realities of our enterprise,” Mr Khosrowshahi mentioned.

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