Ride-hailing turns very bumpy for Uber as it cuts yet more jobs

Ride-hailing company Uber is enduring the most tumultuous of rides and has now slashed 25% of its workforce as it struggles to come to terms the effects of the pandemic on its business.

Like virtually every company involved in the movement of people – whether auto companies, airlines, ships or taxi businesses – the reality that people are staying home in droves for both work and leisure has hit extraordinarily hard.

The business hailed as an innovator and game-changer has itself been disrupted by a turn of events nobody saw coming. The San Francisco-based company founded in 2009 finds itself at a crossroads where all the traffic lights seem to be red and there's no pointsman to send it in the right direction.

Uber has now cut 6 700 jobs in two weeks

This week the company cut an additional 3 000 jobs and closed dozens of its offices, only two weeks after it dismissed 3 700 employees working in customer support and human resources roles.

In all, it has now got rid of 25% of its workforce since the start of the pandemic. Official communications coming from Uber have pointedly declined to suggest that these are the last of the layoffs.

Among the changes to business operations announced this week are the closure or consolidation of 45 offices around the world. The company is closing a business that works on developing new products and services for the Uber platform, as well as a unit working on artificial intelligence. It will also be re-evaluating a job recruiting app called Uber Works.

Uber has already sold a business unit focusing on developing electric bikes and also sold off its Southeast Asia ride-hailing business to a regional rival called Grab.

Ride-hailing business dropped off by 80% in April

Uber's ride-hailing business, which is the company's mainstay and leading profit generator, fell by 80% in April 2020 compared to the same month last year.

According to a report by Associated Press, Uber lost US$2.9-billion in the first quarter as the coronavirus pandemic decimated its overseas investments. Careem, which is Uber's subsidiary in the Middle East, has cut its workforce by 31%, for example.

"Although Uber's main ride-hailing division is now profitable, the food delivery operations still lose money and other bets such as autonomous vehicles and air taxis have yet to be proven," said Bloomberg news agency.