Antonio Manaytay Tech 11.03.2022 15:Nov PM EDT

Lyft to Lay Off 13% of Its Employees; Other Companies Like Snapchat, And Netflix to Cut Back, Too

Ride-hailing company Lyft is going to lay off some 13 percent of its over 5,000 employees. Company officials announced on Thursday, Nov. 3.

Company President John Zimmer and CEO Logan Green, in an email to employees, said the cutback of the number of employees was a management decision after a thorough assessment of the company's performance.

Recession And Rising Insurance Costs

The two officials also pointed to a recession that is likely to hit in 2023 and the rising costs of rideshare insurance.

Both officials stressed the need for the company "to become leaner, which requires us to part with incredible team members."

The company has worked hard to reduce the costs of operations, suspending important initiatives, but laying off some employees is necessary for the organization to respond to external events.

Layoffs Hit Tech Companies

The San Francisco-based company assured all employees affected by the decision of support. That support comes in the form of 10-week pay, health insurance coverage until April next year, hastening the vesting equity for the Nov. 20 equity vesting date, and assistance in recruitment.

Lyft is only one of the many companies, tech companies included, to implement a layoff of their employees this year.

Towards the end of October, over 45,000 tech employees in the United States were laid off, Crunchbase News reports.

American streaming giant Netflix had already slashed the number of jobs.

Twitter is also one of the high-profile companies that have also laid off some 25 percent of the company's employees. Its new owner, Elon Musk, has reportedly ordered the cutback.

Robinhood, Glossier and Better had also joined the bandwagon citing various reasons, including a negative outlook for the US economy next year.

Other Big American Businesses

Other big American businesses have also cut down the headcounts of their employees.

While Peloton had laid off thousands of its workforce, Re/ Max, a real estate company, had reduced its headcount by 17 percent.

Companies known for resisting layoffs, such as Shopify were also cutting down on their number of employees.

Here is the list of some notable companies so far:

1. Gap. The company is going to lay off some 500 or 5 percent of its workforce, the Wall Street Journal reports.

According to Bob Martin, the interim CEO of Gap, the reason for the cut down of headcount was the rising costs of operations and profitability.

He said the cutback would impact company-wide and in places where Gap had established its presence, such as New York and Asia.

2. Snap. The camera company had laid off some 20 percent of the company's workforce in August, The Verge reports.

The layoff had affected a fifth of the company's 6,400 employees. It will impact employees in Snap's divisions, such as Zenly, a social map app it acquired in 2017. The hardware division of Snap also shared the cuts.

3. Wayfair. Some 870 company employees were impacted by the layoff of the furniture and home goods company implemented. The layoff, which had affected about 10 percent of its corporate team, cost Wayfair at least $30 million, paying the benefits due to the laid-off employees.

The list of companies implementing a cutback to their headcounts goes on. A tally by Insider includes big businesses such as Ford and Credit Suisse.