Uber would have cut 3,000 more jobs

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Khosrowshahi told employees in the email that Uber “had worked to provide solid severance and other supports for those leaving Uber, such as medical coverage and a directory of alumni.” He also takes special considerations to support people on US visas or parental leave, he said.

In a file filed with the Securities and Exchange Commission on Monday, Uber estimated it would take a charge of $ 175 million to $ 220 million related to the reductions primarily in the second quarter of 2020, including about 110 million to 140 million dollars. dollars related to severance and termination pay. in addition to stock-based compensation. Site closings are also included in these expenses, which Uber says will range from $ 65 million to $ 80 million, including about $ 25-30 million in leasehold write-offs.

The company said its latest round of cuts would cost approximately $ 35 to $ 40 million.

Uber’s board of directors will give up 100% of its cash reserves for the rest of the year, according to the file. The company said the measures are expected to save at least $ 1 billion a year and that its main business functions would not be affected by the cuts.

Before the pandemic, Uber’s goal was to achieve EBITDA profitability by the end of the year, but has since acknowledged that current conditions have delayed this deadline. With limited travel, Uber has seen the number of users slow for its basic service, although Khosrowshahi told analysts earlier this month that turnover was starting to recover after an initial decline.

Gross bookings for Uber’s food delivery service have increased 50% year-over-year as more people order during home stay mandates. Uber recently made an offer to buy its food delivery rival GrubHub, although it remains unclear whether this deal will be reached. If Uber were to acquire GrubHub, it would join the two largest food delivery application services under one company. But even though Uber Eats has experienced strong growth, it continues to lose money.

Khosrowshahi refrained from making promises for the future in his memo, citing the ever-changing nature of the crisis.

“Having learned my own personal lesson on the unpredictability of the world of the punch called COVID-19, I will not make any statement with absolute certainty about our future,” wrote Khosrowshahi. “I will tell you, however, that we are making really, really difficult choices now, so that we can say goodbye, have as much clarity as possible, go ahead and start building again with confidence. “

Here is the full message from the CEO of Uber:

Uber team:

These times have been unprecedented and difficult for everyone – our societies, our governments, our families, our economies, all over the world. They have also been difficult for Uber, and many of you have, because you have been waiting for us to set the course. I made it clear that we need to take strict measures to resize our business to the new reality of our business, and that I will come back this week with the details.

Today, I have the details: we made the incredibly difficult decision to cut our workforce by about 3,000 people and reduce investment in several non-essential projects. As a management team, we have had to take the time to make the right decisions, to make sure we treat our employees well and to make sure we can guide you in our decision making in the detailed and transparent way you deserve. .

Where we started and tough choices

We started 2020 on an accelerated path to total business profitability. Then the coronavirus hit us with a unique economic and public health crisis. People are rightly staying at home, and our Rides activity, our main generator of profits, is down by about 80%. We are seeing signs of recovery, but it is coming off a deep hole, with limited visibility as to its speed and shape.

You’ve heard me say it before: hope is not a strategy. While this is easy to say, the truth is that it was a decision I struggled with. Our track record is solid, Eats is doing well, Rides looks a little better, maybe we can wait for this damn virus … I wanted there to be a different answer. Let me speak to a few other CEOs … maybe one of them will tell me good news, but there just wasn’t good news to hear. In the end, I realized that hoping that the world would return to normal within a foreseeable time, so that we can resume where we left off on the path to profitability, was not a viable option. .

I knew I had to make a tough decision, not because we are a public company, or to protect our stock price, or to please our board of directors or our investors. I had to make this decision because our very future as an essential service for the world’s cities – our presence for the millions of people and businesses that rely on us – demands it. We need to establish ourselves as an autonomous business that no longer depends on new capital or investors to continue to grow, develop and innovate.

We must take these difficult steps to stay strong on our own feet, to secure our future and continue our mission.

I know that none of this will make life easier for our friends and colleagues affected by the actions we are taking today. For those of you personally affected, I am truly sorry. I know it will hurt you and your families, especially now. Many of you will be affected not because of the quality of your work, but because of the strategic decisions we have made to abandon certain areas of activity or projects that are no longer needed, or simply because of the harsh reality we face. You have been an integral part of this business and every day we will build on the foundations you have laid, brick by brick.

Our decisions and the way forward

We have decided to refocus our efforts on our hearts. If there is a silver lining about this crisis, it is that Eats has become an even more important resource for people at home and for restaurants; and delivery, whether of groceries or other local products, is not only an increasing part of everyday life, it is here to stay. We no longer have to look far for the next huge growth opportunity: we are sitting right above it. I will warn you that as the growth of states accelerates, the business today is not about to cover our expenses. I am confident that the steps we are taking will enable Eats to achieve profitability, just as we did with Rides, but that will not happen overnight.

So we have to fundamentally change the way we operate. We have to make very difficult decisions about what we will and will not do in the future, based on a few principles:

We organize ourselves around our heart: helping people to move and delivering things.

We are building a profitable structure that avoids layering and duplication and can evolve quickly.

We are intentional with our localization strategy focused on key markets / hubs.

Mac will now lead a unified mobility team, which will include Rides and, starting today, Transit. Mac will continue to manage our cross-functional functions such as security and insurance, CommOps, U4B and business development, the latter being centralized between Rides, Eats and Freight under Jen. Pierre will manage what we will call internal “delivery”, including Eats, Grocery and Direct.

With the necessary cost reductions and the increased focus on the heart, we decided to close incubators and AI labs and look for strategic alternatives for Uber Works. Because of these decisions, Zhenya decided that it made sense to leave Uber. Zhenya is client-centered in her heart, and I am deeply grateful for all of her hard work.

We are also looking at our geographic footprint. While it has been useful for many years to cast a large physical net, it is time to be more intentional about where we have employees in the field. We are closing or consolidating approximately 45 offices worldwide, including the closure of Pier 70 in San Francisco and the relocation of some of these colleagues to our new headquarters in SF. And over the next 12 months, we will begin the process of closing our Singapore office and moving to a new APAC hub in a market where we operate our services.

Having learned my own personal lesson on the unpredictability of the world of the punch called COVID-19, I will not make any statements with absolute certainty about our future. I will tell you, however, that we are making some really difficult choices now, so that we can say goodbye, have as much clarity as possible, go ahead and start building again with confidence.

How we help departing employees

As we previewed last week, we’ve taken a lot of feedback and worked to provide solid severance and other supports for those leaving Uber, such as medical coverage and a directory of alumni talent. We also take care to support people in special situations a little differently, such as those with a US visa or parental leave. Although the details vary slightly by country, you can see a summary here [link removed]. Each departing employee will have a 1: 1 ratio to receive details of their individual package.

Given the global nature of these changes and the local rules and regulations involved, today’s individual experience will vary by country:

All other countries (those not listed on the right)

Argentina, China, France, Germany, India, Ireland (WCC only), Italy, Kenya, Netherlands, Norway, Pakistan (Karachi only), Poland, Portugal, Slovakia, South Africa, Spain, Turkey, United Kingdom ( ULL only)

In these countries, we can now communicate on individual impacts.

Everyone affected in these countries has already received an email, and will soon have a calendar invitation to a private meeting with a manager and HR.

If you are in one of these countries and you did not receive a separate email this morning, you are not affected.

In these countries, local laws mean that we cannot be as specific about individual impacts today.

In some countries, we will start a consultation process. In others, there are restrictions on what to do during COVID locking.

If you are in one of these countries, you will receive an email from Nikki describing the next steps for your location.

If you are one of the many Uber teammates involved, I recognize here that any package we offer, regardless of thoughtfulness or generosity, will never replace the possibility of belonging, making a difference, establishing the types links that you establish with any important business or cause. We would not be here without you. We will finish what you started and we will be delighted to see the great things that you will build next.

I am incredibly grateful to * everyone * for reading this email because the resilience and courage you have shown has made Uber the business it is and will continue to be. I have never had a more difficult professional day than today, but Uber has always surprised me with the challenges he has given me. But it’s the most difficult challenges that are worth it, and I know even deeper in my heart than ever that Uber is worth it, and more.

Dara

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