Ride-sharing service Lyft, Uber’s main rival in North America, said it plans to dismiss 982 employees — 17 per cent of its workforce — as part of a cost-reduction plan related to coronavirus.
A further 288 workers have been furloughed, Lyft said in a regulatory filing on Wednesday. Non-furloughed employees are, for the next 12 weeks, taking a pay cut of 10 per cent, while vice-presidents will have a 20 per cent reduction in their salaries.
The company’s executive leadership is taking a 30 per cent pay cut, while board directors have voluntarily given up 30 per cent of their cash compensation for the second quarter of 2020, the filing said.
The San Francisco-based company said it would incur a cost of $28m-$36m relating to the dismissals in the current quarter. It would face further costs for stock compensation, Lyft said, though it did not give an estimate as it depended on the company’s future share price.
Lyft’s stock was up by just over 4 per cent on Wednesday — though still down 36 per cent on its pre-coronavirus price, and less than half its value at the time of the company’s initial public offering in March last year.
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Like all companies in the travel and transport sector, Lyft has seen demand for its services dry up due to the Covid-19 pandemic, as governments enforce lockdowns in markets across the world.
Unlike its US rival Uber, Lyft is unable to offset some of the burden with a food-delivery business — though it did launch an initiative to deliver medical supplies and other essentials to vulnerable people. In March Lyft emailed its drivers suggesting they may be interested in taking a role at Amazon.
Uber is also reportedly considering a 20 per cent reduction in headcount, according to The Information. Uber would not comment, only to say it was “looking at every possible scenario to ensure we get to the other side of this crisis in a stronger position than ever”.