Uber dismisses 435 engineers and designers after announcing millionaire losses. Uber has cut 8% of its engineering and product teams worldwide. The layoffs come after the last presentation of results, in which the company recorded the greatest losses in its history.
Four months after Uber’s stock market debut, the stock is traded around 25% below the initial public offering price. Uber Technologies Inc. is going to lay off 435 employees, the second major personnel cut this summer, as the company faces increasing losses and a drop in its stock market price.
The jobs eliminated belong to the product and engineering divisions, which represents approximately 8% of those groups. Uber said he was going to lay off about 400 employees in marketing, about a third of that department, in July.
Last month, the private vehicle transportation company reported the largest quarterly loss in its history, at $ 5.240 million. This week, California politicians are expected to vote on a labor law that could drastically alter the “gig” or self-employed economy and impose new costs on Uber.
Uber froze the hiring of technical personnel in the United States and Canada last month. A spokesman now says the freeze is over after Tuesday’s cuts.
“We’re not doing this on Wall Street,” said Dara Khosrowshahi, chief executive of Uber, on Tuesday in an email to staff. “We are doing this for Uber. It is essential that we regain our advantage and continually demand that we do better. ”
Uber has more than 27,000 employees and they intend to add more in certain divisions. He presented plans on Monday to hire 2,000 people in Chicago over the next three years at Uber Freight, a service to connect truckers with shipments. The company is committed to road transport as an area of growth, as the revenues of the journeys in private vehicles slow down.
Following its parquet debut in May, Uber also cut the marketing team and lay off 400 people worldwide. Uber has laid off 435 employees worldwide, of which 265 are engineers and 170 belong to the product team, consisting mainly of designers and ‘product managers’.
The news comes shortly after the presentation of its latest results, the worst in its history in terms of losses. In the second quarter of 2019, Uber lost more than five billion dollars – while he entered three thousand. A large part of the losses comes from the compensation that the company had to make to employees who had ‘stock options’ after their IPO in May.
After the parquet debut, Uber also cut staff costs in the marketing team and lay off 400 people worldwide.
Our CEO has asked everyone on the management team a simple but important question: if we started from scratch, would we design our organization as it is today? After considering it, our engineering and product managers have concluded that no. Previously, to meet the demands of a very high-growth startup, we hire quickly and in a decentralized manner,
Uber’s statement on layoffs justifies. “Today we make several changes to return to normal, which include the reduction of several teams to make sure we have the right staff for our priorities.”
In other words: Uber, which has already raised 25 billion dollars of external financing, has grown inordinately and is recognized as oversized. When he made the layoffs in marketing, CEO Dara Khosrowshahi sent an email to the remaining employees saying that “the teams are very large, which creates repeated work and can lead to mediocre results.”
That adds to the doubts about its business model, because it is still one of those companies that are considered “unicorns” for their high valuation but, as a general rule, it loses money in spurts.
Uber currently has about 27,000 full-time employees worldwide. The 435 dismissed represent approximately 8% of the engineering and product teams. 85% worked in the United States; the rest in Asia, Europe, the Middle East and Africa.
The value of the Uber share is currently at $ 33.51, below the 45 to which it came out.