(ELEVATOR) plans to “significantly reduce” its workforce, the company’s new CEO David Risher told employees on Friday, in another round of layoffs as the company struggles to turn a profit and recover.
In a company-wide memo, Risher said the cuts were intended to make Lyft “a faster, flatter company, where everything is closer to our riders and drivers.”
“I accept this decision and understand that it is costly,” Risher continued. “We’re not just talking about team members; we’re talking about relationships with people who have worked (and played) together, sometimes for years.”
The announcement follows Lyft’s November move to cut 13% of its workforce amid fears of an impending recession.
The Wall Street Journal reported that the latest job cuts will result in at least 1,200 job cuts, or more than 30% of the staff. A Lyft spokesperson declined to provide details on the extent of the cuts.
“David has made it clear to the company that his focus is on creating a great and affordable rider experience and driving driver revenue,” a spokesperson said. “To do this, we need to cut our costs and structure our company in such a way that our leaders are closer to the riders and drivers. This is a difficult decision and we do not take it lightly. But as a result, Lyft will become much stronger and more competitive.”
Last month, Lyft announced that Risher, an Amazon veteran, would take over as CEO in April, and co-founders Logan Green and John Zimmer would step down from their senior roles at the taxi company.
Reiser was the 37th employee of Amazon — a company that has long been a blueprint for the on-demand industry — and went on to become the e-commerce giant’s first head of product and head of US retail.
Lyft and Risher face huge challenges. While Uber diversified its business into food and grocery delivery, Lyft never did. This may have hurt the company early in the pandemic, when fewer customers were traveling but more were ordering goods online.
Now Uber is showing new strength In its latest earnings report, Uber said it had “the strongest quarter ever,” reporting a 49% increase in revenue year-over-year. Meanwhile, Lyft’s latest earnings report was unusually disappointing for Wall Street.
Lyft shares rose 6% at noon on Friday, but the company’s shares have fallen about 70% over the past year.
– Katherine Thorbeck of CNN contributed to this report.