Lyft To Let Go Of 13% Of Workforce, Divest Vehicle Business To Beat Slowdown

Lyft, Inc LYFT said it would cut 13% of staff, equivalent to 683 employees.
The ride-hailing company chose to downsize as it struggled to cope with a complex economic backdrop, Bloomberg reports citing an internal memo.
Lyft will also divest its first-party vehicle service business and expects the buyer will offer workers in that division positions.
Also Read: How Will Lyft's Service Fee Hike Affect Its Rides?
Lyft would freeze hiring in the U.S. until 2023 to rein in costs and maintain a profit during macroeconomic instability.
Lyft has more than 5,000 employees, excluding its drivers.
Lyft laid off 60 people, or under 2% of its workforce, in July.
In May, it said it planned to slow hiring and reduce the budgets of some of its departments.
"There are several challenges playing out across the economy. We're facing a probable recession sometime in the next year, and ride-share insurance costs are going up," the Wall Street Journal cites the memo.
"We are not immune to the realities of inflation and a slowing economy," Lyft Co-Founders John Zimmer and Logan Green said in the memo. "We need 2023 to be a period where we can better execute without having to change plans in response to external events — and the tough reality is that today's actions set us up to do that."
Lyft said it maintained previously issued guidance on third-quarter 2022 revenue, contribution margin, and adjusted EBITDA.
It had forecast revenue of $1.04 billion - $1.06 billion and EBITDA of $55 million - $65 million for the third quarter.
Lyft also maintained its 2024 financial targets for $1 billion in adjusted EBITDA with more than $700 million in free cash flow.
The WSJ report specified that rival Uber Technologies Inc's UBER diversified business, which includes global rides operations and a food-delivery arm that became its lifeline during the pandemic, has fared better with Wall Street.
In May, Uber said it would slow hiring.
Both companies have struggled with a driver shortage over the past year, an imbalance that has pushed ride fares to record highs.
Uber said active drivers and riders returned to pre-pandemic levels for the first time in this year's third quarter.
Price Action: LYFT shares closed lower by 2.00% at $13.72 on Thursday.
Photo Via Wikimedia Commons

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