Lyft’s new CEO, David Reicher, has told employees that the company will carry out another round of layoffs next Thursday. According to The Wall Street JournalThe cuts will affect 1,200 or more jobs, but the company has not publicly disclosed any figures. If the cut is that size, that’s a 30% reduction in staff.
In his statement, Risher said many employees already suspect more job cuts are on the way. He said he issued his statement to let people prepare for the results next week. He clarified that managers will not have any additional details until next Thursday, so employees are uncertain about the status of their jobs.
“Why I have made this decision,” Reischer writes in his statement. “As you’ve heard me say, great companies have a purpose. Lyft has two goals that are intertwined: We help riders get out so they can live their lives together, and we Giving drivers a way to work that gives them control over their time and money.”
“We need to be a fast, flatter company where everyone is close to our riders and drivers in order for us to meet that goal,” he continued. “And we need to reduce our costs to deliver cheaper rides, better earnings for drivers, and profitable growth. We invest those savings in competitive pricing, faster pickup times, and better driver earnings.” They all require us to downsize and restructure how we are organized.
Lyft’s new CEO assumed the role only on April 17. He joined co-founders Logan Green, who was CEO, and John Zimmer, who was president. Rasher has a track record in the tech landscape. He had 37 employees at Amazon and was the first head of product and head of US retail. He then became a general manager at Microsoft before moving on to non-profit work.
Rescher said he owns the decision to lay off more than 1,000 employees and that those affected will get some help as they look for new jobs or find another way to make money.
The benefits package includes 10 weeks of salary, with additional weeks for more than four years at Lyft. Health care coverage up to October 31, including access to modern health. Accelerated equity vesting for the May 20 vesting date, and finally, access to career resources, including coaching sessions on resumes and interviews.
With this move, the company believes it can become a customer-focused, large-scale, profitable business. The company’s shares rose 6.1 percent to $10.44 a share on Friday.
Interestingly, ARC Invest CEO Kathy Wood recently said that she expects Tesla stock to skyrocket by 2027 on the back of Robotaxis. Companies like Uber and Lyft will certainly be looking to transition from human drivers to robotaxis as soon as legislation in various jurisdictions allows them. What Lyft is doing now may be in anticipation of that automated future.