Uber to cut workforce by 10% to make platform 'simpler and faster'

Uber is cutting 10 percent of its corporate workforce, amounting to approximately 3,300 jobs, as the company refocuses its efforts toward expanding its robotaxi network. This marks the largest round of layoffs since the height of the coronavirus pandemic and signals a strategic shift aimed at streamlining operations and redirecting financial resources toward autonomous vehicle technology. Chief Executive Dara Khosrowshahi stated that the reductions would help eliminate redundancies and create cost savings necessary to fund the company's ambitious investment in self-driving cars. The decision follows growing pressure from competitors such as Alphabet’s Waymo and Tesla, both of which are actively developing their own robotaxi services. Uber has committed over $10 billion to build out its autonomous driving infrastructure, hoping to leverage its vast customer base of more than 200 million users to gain a competitive advantage. The company aims to roll out robotaxi services in at least 15 cities this year, positioning itself against other players in the emerging sector. According to analysts at Citi, the layoffs should result in around $825 million in annual savings, which Uber intends to reinvest in its autonomous vehicle initiatives. Analyst Ronald Josey suggested that these efficiency gains could be partly attributed to the company’s ongoing artificial intelligence projects, which are helping to streamline internal processes and reduce overhead. In parallel, Uber continues to face challenges in its food delivery segment, particularly in the United States, where DoorDash has captured nearly 64 percent of the market, a record high since the end of the pandemic. Despite gaining traction in Europe, Uber Eats has struggled to maintain its position domestically. The company currently holds a 31 percent share of the U.S. food delivery market, according to data from YipitData. Andrew Macdonald, Uber’s president, is temporarily managing the food delivery division while the company searches for a permanent leader. He is implementing organizational changes that include merging operational teams across different sectors, such as couriers, restaurants, and retail. Uber is also seeking new leadership for its global delivery and commercial functions. Khosrowshahi addressed employees in a letter explaining that the company’s rapid expansion had created structural inefficiencies, leading to increased complexity and coordination challenges. To address this, Uber plans to reduce the number of managers by 20 percent and consolidate small teams, effectively halving the number of micro teams consisting of just one or two individuals. Additionally, the company is limiting the number of employees reporting directly to higher-level executives, aiming to flatten its hierarchy. Uber is also tightening its remote work policies, requiring most employees to return to the office. Only about 1 percent of the workforce will be permitted to continue working remotely, with the majority required to be present in the office three days a week. The company emphasized that this change aligns with its broader goal of reinforcing compliance with its hybrid work model. Recent developments indicate progress in Uber’s robotaxi ambitions. Last month, the company announced that its UK partner, Wayve, had secured approval from Transport for London to begin operating a commercial robotaxi service with a human supervisor behind the wheel. Meanwhile, Uber is finalizing preparations to integrate Delivery Hero, a German food delivery firm, following its acquisition agreement earlier this year. The merger, valued at €13 billion, is expected to enhance Uber’s presence in European markets and support its long-term growth objectives.