Economy

Uber Cuts 3000 More Jobs As Pandemic Squeezes Ride-Hailing

Uber Cuts 3000 More Jobs As Pandemic Squeezes Ride-Hailing”

Uber will be refocusing on its core business, moving people and delivering food, said chief executive Dara Khosrowshahi in a note to employees.

The offices being shuttered include one of Uber's downtown San Francisco hubs, which was home to more than 500 employees. It's closing down some units, including an artificial intelligence lab.

Uber planned to provide laid-off workers with at least 10 weeks pay and continue providing health benefits through the end of this year. Mr Khosrowshahi said that the success of Eats was a "silver lining" among the bad news.

"Ultimately, I realised that hoping the world would return to normal within any predictable timeframe, so we could pick up where we left off on our path to profitability, was not a viable option", he said.

Khosrowshahi also said that Uber, which has been struggling to turn a profit since going public past year, would be scaling back its artificial intelligence lab and product incubator, and would be re-evaluating costly endeavors like freight and self-driving vehicles, according to the report.

Uber lost $2.9 billion in the first quarter as the coronavirus pandemic decimated its overseas investments.

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Looming over all of this, too, is a lawsuit in the USA state of California, where Uber is based, seeking to legally enforce employee status on the platform's many drivers, who are now classified as independent contractors - a cost-saving decision by Uber that allows it to skirt paying minimum wage, overtime pay, businesses expenses like petrol, or healthcare to its core non-salary workforce.

In a separate regulatory filing, Uber on Monday said the lay-offs and restructuring measures are expected to generate $1 billion in annual cost savings compared to pre-pandemic estimates. The suit seeks restitution for unpaid wages owed to drivers, among other things.

The ride-hailing business has suffered a near-total collapse as large parts of the United States and the rest of the world shut to combat the spread of the virus.

"We no longer need to look far for the next enormous growth opportunity: we are sitting right on top of one", he added.

The firm has seen a 50 per cent increase in orders from its Uber Eats food delivery arm, but at the same time travel restrictions have hit its taxi business hard and hampered its plans to become profitable.



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