Lyft is laying off some of its employees again.
The popular ride-hailing company has announced it is laying off 26% of its workforce and scaling back its hiring to reduce its spending and become profitable again.
Lyft previously laid off over 5,000 of its employees in early Nov. 2022 after a thorough assessment of the company's performance following the recession and rising insurance costs.
Lyft Layoffs Details
Lyft mentioned in an announcement the Securities and Exchange Commission published that it intends to lay off approximately 26% of its workforce, or 1,076 employees, as part of its restructuring plan to reduce operating costs.
An Engadget report mentioned that Lyft's new CEO, David Risher, called for streamlined business and a renewed focus on the "needs of riders and drivers" - the restructuring is part of his plan to achieve just that.
The company expects to spend around $41 million to $47 million to lay off these employees, which would afford them severance and employee benefits in the second quarter of 2023, all of which will be future cash expenditures.
Similarly, it also scaled back its recruitment operation, eliminating over 250 open positions in the process.
This isn't the first time Lyft laid off many of its employees. It previously did so in early Nov. 2022, which led to the unemployment of over 5,000 of its employees at the time. At the time, company President John Zimmer and then-CEO Logan Green said that it had to execute the layoffs to cut back on the number of employees on its payroll to make the company leaner, despite the fact that it would need to part with "incredible team members" in doing so.
Lyft previously promised it won't lay off anyone as a result of the economic recession and rising costs of rideshare insurance in May 2022, with it cutting back on hiring, reducing the costs of operations, and suspending important initiatives to make good on its promise. Unfortunately, laying off some of its employees became the only way for it to respond to the previously mentioned external events.
The Great Layoffs For Tech Companies
Lyft isn't the only tech company forced to let go of its employees in recent times. Meta had laid off thousands of its employees to become profitable during its "year of efficiency." Popular e-commerce company Amazon has also initiated mass layoffs in the past few months, which affected more than 18,000 employees since the start of 2023, per CNET.
Even Zoom, the rising star in video conferencing during the COVID-19 pandemic lockdowns, had to let go of 15% of its workforce, or around 1,300 employees in early February, per CNBC.
Most, if not all, of the tech companies that laid off their employees, did so due to the ongoing economic recession that increased their operations expenses along with their rapid but unsustainable growth during the COVID lockdowns, leading them to become unprofitable once the lockdowns ended.
