Lyft lays off nearly 700 employees in second round of job cuts

Lift a company

LYFT -0.39%

It said it would cut 13% of employees, or nearly 700 jobs, and is the latest tech company to say it needs to cut costs before then. volatile economic conditions.

Confirming an earlier Wall Street Journal report, Lyft founders John Zimmer and Logan Green announced the staff cuts Thursday. “There are many challenges playing out across the economy. We are facing a potential recession sometime next year and the costs of insuring shared flights are rising,” they wrote in the note seen by the newspaper.

“We worked hard to cut costs this summer: We slowed down, then we froze hiring; cut spending and paused on less-important initiatives. However, Lyft has to get leaner, which requires us to let go of incredible team members.”

The passenger transportation services company has more than 5,000 employees, not including its drivers. Leave 60 people, or less than 2% of its workforce, in July. In May, she said so Planning to slow hiring And reduce the budgets of some of its departments.

Big and small technology companies Hiring freeze announced or Recruitment Discounts This year after many were hired at breakneck speed during the pandemic and are now facing tougher economic expectations. this week,

Amazon.com a company

He told the staff It stops hiring companies temporarily and start paying Stripe Inc. On Thursday she said so laying off about 14% of its employees. Both blamed the harsh economic climate for their decisions.

San Francisco-based Lyft has also said it will sell its vehicle service centers, and most of that team is expected to receive roles from the acquiring company, which it did not name. Lyft has positions in nine markets.

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The company maintained its third-quarter and 2024 earnings forecasts but said it expects to incur between $27 million and $32 million in layoffs related restructuring Thursday in the fourth quarter of this year. The company announced third-quarter results on Monday.

Lyft shares have underperformed the broader market over the past 12 months. During Wednesday’s close, its stock is down 71% from a year ago while the tech-heavy Nasdaq Composite is down 33%.

Competition

Uber Technologies a company

The diversified business, which includes global ride-hailing operations and the food delivery arm that has become a lifeline during the pandemic, has fared better with Wall Street. Its stock is down about 37% in the past year.

In May, Uber said It would slow down recruitment. Both companies have experienced driver shortages over the past year, an imbalance that has pushed ride prices to record levels. Uber said active drivers and riders returned to pre-pandemic levels for the first time in the third quarter of this year.

write to Pritika Rana at [email protected] and Emily Glazer at [email protected]

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