Uber cuts 3,300 jobs to flatten management, stock ticks up

Uber has announced a cut of about 3,300 jobs and roughly 10% of its staff in a restructuring aimed at thinning management and shifting the company’s focus to delivery and self-driving cars, according to a statement from CEO Dara Khosrowshahi on Wednesday.

Higher ranks at management levels are expected to see a drop of 20%. Some of these managers will move into individual contributor roles within the company.

CEO Khosrowshahi has blamed years of expansion for the bloat in the workforce in his note to the staff. The CEO said the company had accumulated more layers and fragmented ownership, while also involving structures that were sensible for smaller businesses but no longer of use at Uber’s current scale.

Micro-teams targeted amid tighter office policy

Uber is going after what it calls micro-teams involving groups of just one or two people, and plans to cut their number by about half. The company also wants fewer employees sitting far from the top of the organizational ladder. This means the number of staff that are farther from the CEO by over seven organizational levels will drop by 20%.

The company is also collapsing its separate restaurant, retail, and delivery units into one structure split across global, regional, and local tiers. It is also merging its Core Services Engineering and Science teams.

Uber’s cuts have been launched alongside a tighter office policy. Remote-work eligibility will be capped at just about 1% of the workforce, which means almost all off-site employees will have to relocate within commuting range of a company office.

The reductions leave Uber with under 30,000 employees, which is close to where its headcount stood in 2021. Investors seemed to be pleased with the news, as shares climbed as much as 1.7% in premarket trading after the announcement.

Where layoff savings are going

Autonomous vehicles are a clear priority, and Uber has committed more than $10 billion to self-driving partnerships and put significant capital into companies including Avride, Lucid (LCID), Nuro, and Rivian (RIVN), Bloomberg reported. Drivers, couriers, and merchants are also in line to get more investment.

CEO Khosrowshahi claimed the cuts could be seen as a way to free up money to spend in other areas. The changes from the layoffs would “generate savings that we intend to reinvest in growth, innovation, and the capabilities that will matter most over the coming years,” the CEO told staff.

The announcement comes after similar employee headcount cuts from earlier in the year. Uber laid off 23% of its People and Places division, which handles HR, recruiting, facilities, and culture. A spokesperson claimed that reduction affected below 1% of the 34,000-person staff Uber had at that point in time.