The ride-hailing company, Lyft, has said it will axe 13% of jobs as it faces up to the tough realities of inflation and a slowing economy. It has announced these cuts on the same day that Stripe announced cuts and Amazon put a freeze on new corporate hires. In addition to job cuts, Lyft is pursuing the sale of its first-party vehicle service business, but says most of the team will be hired by the acquiring company.
Lyft said that a possible recession and increased insurance costs are forcing it to become leaner. Over the summer it has tried to bring down costs by slowing and then freezing hiring, cutting spending, and pausing less-critical initiatives. Despite these efforts, the firm says it needs to still become more nimble, so it’s axing 13% of jobs. According to CNBC, Lyft currently hires around 5,000 people, so around 650 of them will be leaving the company.
Commenting on who would be losing their jobs, the firm said:
“The layoffs impact every organization in the company, and were based on deprioritized initiatives, an effort to reduce management layers, broader savings goals, and, in some cases, performance trajectory.
We are confident in the overall trajectory of the business. It was important to take these proactive actions to ensure we can accelerate execution, stay focused on the best opportunities to drive profitable growth, and deliver strong business results in 2023 and beyond.”
While times will be difficult for those leaving the company, Lyft will be providing a lifeline as former employees find new work. It will give former employees 10 weeks of pay, healthcare coverage until April 30, 2023, accelerated equity vesting for the November 20 vesting date, and recruiting assistance which includes coaching sessions on resumes and interviews. Those who have been at the company for four or more years will receive an additional four weeks of pay from the firm.