Uber Cuts 3,000 More Jobs, Shuts 45 Offices in Coronavirus Crunch (wsj.com) 31
Uber is cutting several thousand additional jobs [Editor's note: the link may be paywalled; alternative source], closing more than three dozen offices and re-evaluating big bets in areas ranging from freight to self-driving technology as Chief Executive Dara Khosrowshahi attempts to steer the ride-hailing giant through the coronavirus pandemic. From a report: Mr. Khosrowshahi announced the plans in an email to staff Monday, less than two weeks after the company said it would eliminate about 3,700 jobs and planned to save more than $1 billion in fixed costs. Monday's decision to close 45 offices and lay off some additional 3,000 people means Uber is shedding roughly a quarter of its workforce in under a month. Drivers aren't classified as employees, so they aren't included. Stay-at-home orders have ravaged Uber's core ride-hailing business, which accounted for three-quarters of the company's revenue before the pandemic struck. Uber's rides business was down 80% year-over-year in April.
Uber's Cutting Costs To Buy Grubhub (Score:5, Informative)
Discussions between Uber and Grubhub are still on-going. But Grubhub wants more Uber shares.
Grubhub Rebuffs Uber’s Latest Offer as Merger Talks Continue -- Uber’s offer of 1.9 shares per Grubhub share was deemed insufficient Sunday [wsj.com]
Uber's cutting costs to help pay for Grubhub buy out.
Why does Uber have offices? (Score:1)
What do they do there? Is this some way to excuse taking more out of the driver's kitty?
Re: (Score:2)
Complaint Department.
Share and Enjoy!
Re: (Score:2)
Re:Why does Uber have offices? (Score:5, Insightful)
What do they do there?
Uber's current business model is unsustainable and always has been. They lose money on every ride as they struggle for market share. But ride-sharing is a business with very low barriers to entry, so gaining market share is like grabbing smoke.
So Uber's only long-term chance to survive is to change the business. Perhaps with self-driving cars. Perhaps by diversifying into food delivery. But they need to find something that turns a profit.
That is what many of these people were working on. Eliminating these jobs cuts short-term expenses, but at the cost of diminishing any chance Uber ever had of long-term viability.
Re: (Score:2)
Re: (Score:3)
Losing $1B per month, how much longer can they sustain the burn?
Uber has $6B in cash and a $2B revolving credit line. As a public company, they can raise more anytime by issuing stock.
Uber's market cap is $60B. They will be around for a while.
You may think it can't last that long because no investors will be stupid enough to keep a stake in a company with no hope of ever recouping enough profit to make up for the losses. But that is demonstrably untrue. Uber has had no plausible path to profitability for years, yet they still had a successful IPO. There are plenty
Re: (Score:3)
Losing $1B per month, how much longer can they sustain the burn?
Uber has $6B in cash and a $2B revolving credit line. As a public company, they can raise more anytime by issuing stock.
Uber's market cap is $60B. They will be around for a while.
You may think it can't last that long because no investors will be stupid enough to keep a stake in a company with no hope of ever recouping enough profit to make up for the losses. But that is demonstrably untrue. Uber has had no plausible path to profitability for years, yet they still had a successful IPO. There are plenty of stupid investors.
And Softbank, one of those stupid investors and probably the highest profile of them as well, just lost $5.2 billion on their Uber investment. That is going to make any future investors pause.
This is nonsense (Score:2)
Uber is profitable per ride. The high fixed costs to grow in the market are over. They still lose money per order on Uber Eats and other ventures. They were using the ride money to fund their growth into other sectors (like those eScooters.)
As to what those people did, they are shuttering their AI division (self-driving cars), their internal incubator (new ideas) and a temp agency for businesses/fiver mashup. That's a lot of R&D and a lot of trying to grow a new B2B market that doesn't exist right n
Re: Why does Uber have offices? (Score:2)
Uber's side gig is trying to make a self driving car.
Re: (Score:2)
The employee are in marketing, corporate development, research, and other things like that. It all looks good on paper and if you have money to burn.
And they all had trouble finding a way home (Score:2)
Will Uber Recover? (Score:2)
Granted I never had taken an Uber myself, and I see a lot of shady things the company does.
However I am wondering if Uber can recover from this? As a lot of businesses are changing to a long term work from home plan, as well getting use to not having to travel for every meeting. Even after the pandemic is controlled, I don't see demand coming back.
Re: (Score:3)
Granted I never had taken an Uber myself, and I see a lot of shady things the company does.
However I am wondering if Uber can recover from this? As a lot of businesses are changing to a long term work from home plan, as well getting use to not having to travel for every meeting. Even after the pandemic is controlled, I don't see demand coming back.
With almost every restaurant and grocery store moving into delivery (or with services popping up offering to go shopping for you) Uber lost another pretty big customer segment; that of people who don't want a car just to do grocery shopping every week. They might see a bit of an uptick in the "wasted at 2am and need a ride home" market segment as bars start opening back up but that won't be a sustained bump.
Re: (Score:2)
"Ill uber from work to the ballpark, and the wife is driving me home"
"im not parking my car in that neighborhood, I replaced the side mirrors the last time"
"its 6pm and the meeting is 10am, I got to get something other than airport/convention center food."
"lets meet for dinner and see how it goes, get out I called you an uber"
"the girls want to go uptown before we all end up on barf
Re: (Score:3)
"getting use to not having to travel for every meeting"
Yup, that's keeping me up at night too (travel industry IT worker here.) Airlines make so much money off these stupid useless last minute business trips people take. They make tons off the consulting companies flying their little drone new grads out for yet another week of PowerPoints. Same goes for restaurants, Uber, hotels, etc. etc. Leisure travel...not so much. Those are the deep diiscount non-refundable tickets that business people don't buy. Espe
Re: (Score:2)
Re: (Score:2)
I'm thinking Southwest is going to be in serious trouble, because they focused on that market more than any other airline.
I fly a lot of Southwest. I flew with them this morning even. Last month there were about 20 people on a plane and very limited flights. Today the plane was 1/2 to 2/3 full, although flights are still very limited. It's slowly, very slowly, coming back.
I think you are wrong about Southwest being uniquely affected. In normal times, their pricing tracks quite closely with their competitors. The break points are at 2 weeks from departure and 1 week from departure, assuming the plane is not empty or ne
They were losing over 4 billion/year before covid (Score:3)
Uber was losing over $4 billion/year before Covid. Only now they are looking for ways to cut costs?
If you haven't seen it, the Uber series on Naked Capitalism is interesting:
https://www.nakedcapitalism.co... [nakedcapitalism.com]
Re:They were losing over 4 billion/year before cov (Score:4, Informative)
Only now they are looking for ways to cut costs?
Uber's been cutting costs (laying off employees, selling parts of business) ever since they went public [slashdot.org] in May 2019.
Just what's been reported here on /.
July 2019 - https://tech.slashdot.org/story/19/07/30/0529217/uber-lays-off-400-people-on-its-marketing-team
September 2019 - https://tech.slashdot.org/story/19/09/10/1927215/uber-lays-off-435-people-across-engineering-and-product-teams
October 2019 - https://tech.slashdot.org/story/19/10/14/1745212/uber-lays-off-another-350-employees-across-eats-self-driving-and-other-departments
January 2020 - https://news.slashdot.org/story/20/01/21/080223/uber-sells-food-delivery-business-in-india-to-local-rival-zomato
May 2020 - https://tech.slashdot.org/story/20/05/06/141206/uber-is-laying-off-3700-as-rides-plummet-due-to-covid-19
May 2020 - https://tech.slashdot.org/story/20/05/08/2023222/uber-loses-29-billion-offloads-bike-and-scooter-business
May 2020 - https://tech.slashdot.org/story/20/05/18/1540256/uber-cuts-3000-more-jobs-shuts-45-offices-in-coronavirus-crunch
A lot more cost cutting occurring in May because... Grubhub? Covid-19? Both?
45 Offices??? (Score:5, Insightful)
Why the hell do they even have anywhere close to that many offices in the first place?
There's nothing about the Uber app and platform that I've ever seen that calls for that kind of distributed development. It's a fairly bog-standard combination of location, messaging, and billing. Sure, if you have a big cluster of developers outside the Bay Area, open a satellite office in Seattle or New York or wherever. And if they're still on the self-driving train down in Arizona; open an office there too. Other than that? More than those two, three, or maybe four offices is a gross inefficiency. Just have those developers work from home or a WeWork or something. It's not like Uber needs local sales offices in v various markets or anything. And there not running their own datacenters. Everything about it... aside, perhaps, from the self-driving testing... could easily be done in the San Francisco headquarters. Those 45 offices should never have existed in the first place.
Good thing I never bought Uber stock, with them running things like this.
Re: (Score:3)
Re: (Score:1)
Similarly confused, especially given the bit about these 3,000 plus the 3,700 announced just a short time ago only being "roughly a quarter" of Uber's workforce. That means after these cuts, Uber still has about 20,000 employees (not drivers) doing... what, exactly?
COVID kills unicorns too, I guess (Score:3)
Guaranteed, someone will post "3700 jobs, what could they possibly be doing to run a ride hailing app?" I'm just waiting for it.
That said, it really does look like COVID might be the end for some of the less well-positioned Second Dotcom Bubble unicorns. Since Uber is public, now it's up to the stock market to decide whether to punish or help them. Hopefully business will pick up for everyone once the virus becomes a nuisance rather than a threat. I work in the travel industry so I'm very concerned about the next few months. Any company depending on consumers for revenue and not delivering things to their houses is in for a rough ride. Asset-poor "lean" companies who just coast on their cash flow month to month are toast if they can't convince people to lend them money. Even messed-up JCPenney had its real estate to make a funny-money company out of to raise money to operate during bankruptcy. Uber's got a bunch of leases on swanky preschool office space in expensive cities and a ton of cloud bills to pay to keep the service going.
I do wonder how much of that 3700 (and the others laid off previously) was just straight up bubble-fueled hiring...like they had the money and it was a party so why not just hire your frat bros kind of thing. This was pretty much standard in 1999 during the first bubble...you had a lot of 24-year-old CEOs who had no idea how to run a company being given millions of dollars. I mean if I was in that spot I don't think I'd say, "Nah, I don't want your $250M, I'm not qualified." I know Uber had to clean up its act a little bit after going public, but I don't think all of the crazy spending went away overnight...just hidden from investors better!
Re: (Score:2)
That said, it really does look like COVID might be the end for some of the less well-positioned Second Dotcom Bubble unicorns.
Well it's capitalist Darwinism at work. Survival of the fittest. Whichever companies survive the Coronavirus episode will be worth investing in. Clearly Uber wasn't one of them - and a good riddance too, for a lot of reasons.
Pandemic is the perfect excuse (Score:2)
Drivers aren't classified as employees (Score:3)
Actually, yes they are. Uber won't admit that. When the courts force them too, likely California first, gonna be even more interesting.
Here's a question (Score:2)
What The (Score:2)
"Mr. Khosrowshahi announced the plans in an email to staff Monday, less than two weeks after the company said it would eliminate about 3,700 jobs"
What the hell does Uber need 3700 people for?? It's a ride-sharing app, not a moonshot. What the hell are they doing with all those people? Serious question.