Uber Technologies shares rose about 2.4% in Wednesday morning trading after reports that the company plans to cut around 3,300 jobs, or roughly 10% of its global workforce. Uber shares rose after the company announced major job cuts. The layoffs are part of a restructuring aimed at reducing management layers, cutting costs and making the company’s structure simpler.
Uber said the restructuring will reduce the number of managers at the company by about 20%. Uber had about 34,000 employees worldwide at the end of last year, according to its annual report. The company last made bigger cuts in May 2020, when it laid off about 6,700 workers, or nearly one-fourth of its workforce. Uber shares rose about 2% in premarket trading after the news, which was first reported by Bloomberg News, Reuters reported.
The layoffs will mainly target management roles. These will be Uber’s biggest job cuts since the pandemic. Investors reacted positively to the job cuts. The rise shows that investors may see the job cuts and simpler company structure as a good move to lower costs and improve efficiency.
Some managers will be moved into individual contributor roles instead of being removed from the company, according to a company spokesperson cited by Bloomberg News.
The company will also reduce the number of employees who are seven or more reporting layers below the CEO, Reuters reported. Uber wants to remove layers that have built up as the company grew. The company is also cutting down on small teams. Uber is combining several teams to make decisions faster. The company plans to streamline its core engineering, science and delivery groups. Uber will also combine its three operations teams focused on restaurants, retail and its white-label delivery service.
CEO Dara Khosrowshahi said Uber’s growth has created more management layers, more coordination and less clear ownership of work. He said some company structures that worked when Uber was smaller no longer make sense at its current size, according to an email obtained by Bloomberg News. Uber plans to reduce by nearly half the number of “micro-teams” with only one or two direct reports.
