Lyft is significantly cutting back its staff. The ride-hailing company revealed in a regulatory filing on Wednesday that it’s terminating about 982 employees, which is 17% of its workforce.
Lyft said the layoffs are part of its efforts to reduce operating expenses and adjust cash flows because of “ongoing economic challenges resulting from the COVID-19 pandemic and its impact on the company’s business.”
The belt tightening comes as Lyft has seen its business curtailed by the novel coronavirus pandemic. It’s seen its ride-hailing revenue dry up, along with its bike and scooter rentals. In an effort to diversify its offerings, Lyft has rolled out a series of new programs, such a pilot for delivering medical supplies and test kits to senior citizens and other vulnerable populations. It’s also working on a meal delivery program and has partnered with Amazon to provide the retail giant with delivery drivers.
Uber has also experienced a financial hit during the crisis. Speculation spread on Tuesday that it too was planning employee layoffs with a reduction of about 20% of its staff, according to The Information. When asked about possibly cutting back its staff an Uber spokesman told CNET, “As you would expect, the company is looking at every possible scenario to ensure we get to the other side of this crisis in a stronger position than ever.”
For Lyft, along with letting go of staff, the company is also furloughing about 288 employees and has begun salary reductions for a 12-week period beginning in May. The salary reductions will be 30% for executives, 20% for vice presidents and 10% for all other workers. Members of Lyft’s board of directors have also volunteered to waive 30% of their cash compensation for the second quarter of this year.
Both Lyft and Uber are scheduled to have earnings calls with investors next week.
Lyft didn’t immediately return request for comment.