Lyft Cuts Nearly 1,000 Jobs and Furloughs Hundreds Amid Pandemic
Lyft reduces its workforce by 17 percent, laying off 982 employees and furloughing 288 more as the COVID-19 pandemic devastates the ride-hailing industry. The company also implements widespread salary cuts for executives and staff to manage the financial fallout.
Lyft reduces its workforce by 17 percent, laying off 982 employees and furloughing an additional 288 workers as the COVID-19 pandemic severely impacts its business. The company implements immediate salary reductions of 30 percent for executive leadership, 20 percent for vice presidents, and 10 percent for all other employees. Board members also forfeit 30 percent of their cash compensation for the second quarter of 2020.
These cuts contribute to a tech sector that sees over 32,000 layoffs since mid-March, with the transportation industry suffering particularly brutal losses. Stay-at-home orders and fears of infection in enclosed vehicles cause ride-hailing demand to plummet, which in turn drastically reduces the earnings of self-employed drivers who still have vehicle payments to make.
Lyft absorbs a restructuring charge of up to $36 million in its second-quarter financials and promises $6.5 million to support drivers and vulnerable communities during the crisis. Despite the drastic cost-cutting measures and the potential threat to previous profitability pledges, Lyft and its rival Uber both see their stock prices rise following the announcement.