Uber to cut 10% of jobs, or 3,300 roles, to reduce management layers

Uber Technologies Inc. is cutting about 3,300 roles, or 10% of its staff globally, in a massive restructuring aimed at reducing management layers and reallocating spending into its ride-sharing, delivery and robotaxi businesses.  

Chief Executive Officer Dara Khosrowshahi announced the changes in an email obtained by Bloomberg News, saying that Uber's growth in recent years has created "more layers, more coordination, more fragmented ownership, and in some cases structures that made sense when businesses were smaller but no longer serve us well at our current scale."

 The cuts will reduce the number of managers in the company by 20%, with some being moved to the role of an individual contributor, an Uber spokesperson said. The company didn't disclose what percentage of managers would be laid off, however. The cuts also apply to people who aren't managers. 

 

 To make Uber "simpler and faster," it is cutting the number of "micro-teams" with one or two members by about 50% and paring back the number of employees who sit more than seven layers down from the CEO, Khosrowshahi said. The company is also streamlining its core engineering, science and delivery groups, including combining its three operations teams for restaurants, retail and its white-label delivery service.

 Shares of Uber rose as much as 2.1% to $76.79 in New York before paring most of those gains to trade less than 1% higher.

And as part of an ongoing push to ask more staff to work in-person at key office locations, Uber is also mandating that only about 1% of employees can be remote going forward.

 Khosrowshahi said the changes will "generate savings that we intend to reinvest in growth, innovation, and the capabilities that will matter most over the coming years." He said more investments will be made into drivers, couriers and merchants around the world, in addition to upgrades for its core business and work being done to build an "autonomous future."

 The move comes as Uber has vowed to commit more than $10 billion to robotaxi partnerships in the coming years as it seeks to transform its service into the go-to platform for hailing an autonomous vehicle. The company has reallocated capital in other ways in the past year, including by reducing its stakes in some companies and investing in Avride Inc., Lucid Group Inc., Nuro Inc. and Rivian Automotive Inc.

 The layoffs could translate to about $1.5 billion to $2 billion in annualized savings, Bloomberg Intelligence analysts wrote in a note. "Though heavier investment in autonomous vehicles may limit the near-term margin benefit from the workforce reduction," they added.

 The layoffs follow more targeted cuts the ride-hailing company has made across its customer service and human resources departments this year.

 Unlike Big Tech firms, which have conducted frequent job cuts in the name of heavy spending on artificial intelligence in the last few years, Uber had avoided massive reductions since the Covid-19 pandemic. It said in May that it would moderate the pace of hiring. Wednesday's cuts bring Uber's overall employee count to just under 30,000 people, about where it was in 2021.

 Khosrowshahi did not mention the impact of AI in his announcement, but the changes are also driven by a desire to use more of the technology to drive daily operations. The job cuts are taking place across the US and other countries where the company operates in.

 Khosrowshahi's companywide email in full:

 Team,Today, we're making a number of significant organizational changes across Uber. We are removing layers, simplifying team structures, refining our global location strategy, and focusing our people and investments against the biggest opportunities ahead of us. As a result, we will be reducing the size of our team by about 10%. Everyone whose role has been affected has already been notified, except in countries where we will follow the required local process.This wasn't a decision we made lightly, because it will have a real impact on our teammates and friends who have worked hard for Uber. It's important to say that these changes are about how we're organized and what we're prioritizing, not about anyone's contributions to Uber, which we always value.I'm sure you're asking, 'Why, and why now?'-particularly since our business is performing so well. Over the last 5+ years, Uber has grown by orders of magnitude, with our top line nearly tripling. We've built new products, expanded into new businesses, reached more consumers and supported more earners, and become a much larger and stronger company. But that growth has also brought complexity: more layers, more coordination, more fragmented ownership, and in some cases structures that made sense when businesses were smaller but no longer serve us well at our current scale.Our opportunity from here is enormous: we have the chance to bring Uber to hundreds of millions more people; to invest even more in drivers, couriers and merchants; and to innovate across our core businesses and build the autonomous future. To do those things, we need to make deliberate choices about where we put our people, our time, and our capital.The changes we're making today are designed to do two things: make Uber simpler and faster, and create more capacity to invest in our future. A leaner organization will mean clearer ownership, faster decisions, and more time spent building rather than coordinating. It will also generate savings that we intend to reinvest in growth, innovation, and the capabilities that will matter most over the coming years.It's our job as leaders to make these difficult calls, and to give you transparency into our thinking and our decision-making process. Here's what we are doing and why:

 I realize this is a lot of change, but we decided it was better to make one big shift rather than multiple small ones. We also know organizational changes can be hugely distracting, and our job is to create an environment that allows you to focus and do your best work. With these decisions now made, our focus is on the future.We have tremendous momentum, significant financial capacity, and opportunities in front of us that are larger than at any point since I joined the company. The decisions we're making today are difficult, but they will help us build an even stronger Uber for the years ahead.You can read more about the changes across the company here, and please be sure to read specific follow-up information you'll receive from your leaders about what this means for your team, so we can all keep building together.Uber on,Dara