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Uber scrambles to prevent employee exodus

Company's senior leaders have made impassioned pleas reassuring them it is worth sticking around

Greg Bensinger & Kelsey Gee 

Uber

In the days after Travis stunned Technologies Inc.’s more than 15,000 employees by resigning as chief executive, the company’s senior leaders made impassioned pleas reassuring them it is worth sticking around.
 
Managers including Uber’s chief technology officer, Thuan Pham, and the company’s first CEO, Ryan Graves, now a senior vice president and board member, praised Mr. and urged employees to carry on his legacy—tarnished as it may be—and to turn their focus back to work, according to emails reviewed by The Wall Street Journal.

 
“I don’t know what tomorrow will bring, but whatever it is, we will be able to figure it out together as a team and as a company,” Mr. Pham wrote in a note to engineering staff of the San Francisco-based ride-hailing company. “Our company mission and impact is too important to let it falter.”
 
Uber’s employees are at a crossroads after half a year of scandal, the exit of more than a dozen top executives and their pugnacious leader’s abrupt surrender Tuesday.
 
Thousands of engineers, data scientists, marketers and others had stood by the brash Mr. over the years as battled with city regulators around the world on its way to becoming the world’s most valuable startup, with a $68 billion valuation. Now they have to decide whether to remain with a seemingly rudderless company in urgent need of leadership, or to break loose and, for some, risk losing stock options potentially worth millions of dollars.
 
Months of unflattering headlines and an ongoing investigation into allegations of sexual harassment and sexism at have taken a toll. In interviews, some employees expressed sadness over the company’s now-tainted reputation, while others said they were upset with management for allowing its dirty laundry to be aired. Some said they were hopeful could restore its reputation after adopting nearly 50 changes to improve workplace culture that resulted from an internal investigation into workplace conduct by former U.S. Attorney General Eric Holder’s law firm.
 
Some employees are standing by Mr. More than 1,000 signed an internal petition demanding that the board reinstall him.
 
“Employees, we need to revolt this!” read the petition, reviewed by the Journal.
 
“We’re focused on rebuilding trust with our employees and the communities we serve, and building a company and culture that we can be proud of,” an spokesman said.
 
Mr. stepped down as CEO Tuesday after two venture capitalists at Benchmark confronted him with a signed letter from the firm and four other shareholders demanding his ouster, according to people familiar with the matter. After several hours of deliberation, Mr. relinquished his post. His exit followed the removal or resignation in recent months of more than a half-dozen direct reports and a number of other managers, including the heads of finance, operations, business, marketing and communications. A committee of 14 executives now runs Uber—an unwieldy structure for a company that centralized power and encouraged a confrontational management approach called “toe-stepping.”
 
plans to revise its core values that, in addition to toe-stepping include “principled confrontation” and “always be hustlin’.”?
 
On Thursday, the board met for the first time with three new directors and discussed the CEO search, an spokesman told the Journal. Underscoring the urgency, the board has discussed a time frame of about six weeks for finding a new CEO, according to people familiar with the matter.
 
Some employees said the uncertainty has made it hard to work, especially as they have watched co-workers pack up their desks. Others said they are considering leaving, fearful that could face a struggle to raise new funds. On the other hand, some worry about missing on out a big payday if they leave before their stock options fully vest, which takes four years, or before a reinvention of the company culture.
 
“People are leaving because they feel like it’s on fire,” said Nora Hamada, a recruiter with Mirus Search, who said she has helped a handful of employees find work at other startups.
 
employees once were considered almost unpoachable, because of hefty equity stakes and Uber’s rocketing growth, tech recruiters say. Now, some employers are wary of hiring employees out of concern they could bring the culture with them, recruiters note. One executive at a startup that has hired from said the firm has deliberately recruited junior employees and not managers.
 
“There’s a lot of peer pressure to quit to work at a more ethical company,” Ms. said. Female employees she has spoken with in particular feel pressured by friends and peers at other tech firms to leave, she said.
 
“I’ve heard many of you mention that you’re grappling with mixed emotions this week,” Ann Bordetsky, an business-development executive, wrote in an email Thursday to “the women of ” “Whatever you’re feeling—surprised, nostalgic, optimistic, sad or unphased [sic] (maybe all that and more)—we’re here with you.”
 
In coming weeks, managers are expected to deliver employee performance reviews, using an overhauled feedback and goal-setting framework shaped by two recent hires: Liane Hornsey, chief of human resources, and Frances Frei, senior vice president of leadership and strategy.
 
Rather than numerically ranking employees against one another based on performance and potential career trajectory, and linking the ranking directly with pay, is encouraging managers to help their teams set three or four business goals and broader “citizenship” goals for the company, employees said. Other changes include training in diversity and adopting a version of the “Rooney Rule,” which requires hiring managers to interview diverse candidates for all open positions, according to an email from Ms. Hornsey reviewed by The Wall Street Journal. Managers will have separate training sessions, as nearly two-thirds are in management for the first time.
 
Teams at have now been assigned an “owner” of human resources policies, to whom employees can quickly escalate concerns. “We will not fail you again,” Ms. Hornsey said in the email.
 
Ms. Frei, a Harvard Business School professor hired earlier this month to tackle the company’s workplace issues, has quickly emerged as a leader in remaking the company’s culture. A familiar face around headquarters in the months leading up to her appointment, Ms. Frei this week was traveling to offices in Europe to coach managers and employees on setting “holistic” goals for individuals and teams. The company is encouraging every employee to participate in a training session she is facilitating this summer, according to employees. Ms. Frei referred a request for comment to a company spokeswoman.
 
Employees don’t expect Ms. Frei to single-handedly repair the company’s internal dynamics. But some say she has boosted morale and sparked optimism about change.
 
“The question of the moment right now is how to demonstrate to employees and to drivers that the company is truly changing its culture,” said Michael Useem, a management professor at the University of Pennsylvania’s Wharton School of Business.
 
 

First Published: Sat, June 24 2017. 22:42 IST
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