Lyft shares have slid close to 70% over the past 12 months.
Photo: Al Seib/Los Angeles Times/Getty Images
Lyft Inc. plans to cut 1,200 or more jobs in a new round of layoffs as the ride-sharing company aims to reduce costs, according to people familiar with its plans.
The latest cuts could impact 30% or more of Lyft’s more than 4,000 employees, the people said, and the company had planned to announce the move after a board meeting next week. The cuts could help Lyft slash 50% of its costs, some of the people said. Lyft doesn’t count its drivers as employees.
The move comes days after a new chief executive officially took control and follows an earlier round of cuts that shed about 700 people late last year.
A Lyft spokeswoman said its new CEO “has made clear to the company that his focus is on creating a great and affordable experience for riders and improving drivers’ earnings. To do so requires that we reduce our costs and structure our company so that our leaders are closer to riders and drivers.”
The spokeswoman said that “this is a hard decision and one we’re not making lightly. But the result will be a far stronger, more competitive Lyft.”
Lyft has struggled to keep up with its larger rival Uber Technologies Inc., which gained market share and drivers during the pandemic. Lyft decided not to diversify outside transportation and limited its business to North America, while Uber’s food-delivery business and global operations gave it a boost.
Lyft was also slower to roll out bonuses and new features to entice drivers during a yearslong labor shortage as the U.S. reopened following pandemic lockdowns.
The company’s stock slid close to 70% over the past 12 months, while the tech-heavy Nasdaq Composite Index fell 9%. Uber shares declined 4% over the same period.
Following an initial rise after The Wall Street Journal reported the company’s plan to cut jobs, Lyft shares were little changed in midday trading Friday.
Lyft reported record revenue for the fourth quarter, but investors have been worried about its prospects. Its shares tumbled more than 35% after it announced those results in February because they included a weaker-than-expected revenue outlook for the three months through March. Lyft is scheduled to announce results for the March quarter on May 4.
Late last month, after months of pushback from some employees and investors, Lyft’s co-founders— Logan Green and John Zimmer —stepped back from managing the company. The pair hired a new CEO, David Risher.
Mr. Risher, who served on Lyft’s board and formally took charge on April 17, said in a recent interview that he saw building back employee morale as his priority. He also spoke about reinventing the way the company treats its customers and drivers.
Lyft’s additional cuts come as many tech companies have been slashing their head counts. Globally more than 170,000 people have lost their jobs at tech companies this year, according to data from Layoffs.fyi, a website that tracks media reports and company releases.
In recent months, many tech leaders have spoken about over-hiring during better times over the past two years. Lyft is one of the few to announce several rounds of layoffs. Facebook parent Meta Platforms Inc. said in March that it was cutting 10,000 jobs this year after shedding 11,000 employees late last year, collectively impacting about a quarter of its staff.
Meta Chief Executive Mark Zuckerberg told employees Thursday that he won’t rule out future layoffs.
Lyft had considered cutting more staff than it did late last year, according to people familiar with its plans, but the company’s co-founders settled on shedding the roughly 700 jobs in November. Those layoffs followed months of cost-cutting at the company.
In July, Lyft laid off 60 people—or under 2% of its workforce—and scaled back on businesses such as renting cars to customers. In May, it said it planned to slow hiring and reduce the budgets of some of its departments.
Write to Preetika Rana at preetika.rana@wsj.com, Lauren Thomas at lauren.thomas@wsj.com and Emily Glazer at Emily.Glazer@wsj.com
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