David Risher, a former Amazon exec, took over as CEO of Lyft on April 17. On Friday he told employees he’s going to “significantly reduce” the headcount.
Not an auspicious start.
“We need to bring our costs down to deliver affordable rides, compelling earnings for drivers and profitable growth,” Risher said in a note to staffers.
To accomplish this, he said, it will “require us to reduce our size and restructure how we’re organized.”
How deep will the cuts be? Lyft isn’t yet saying.
But the Wall Street Journal, citing “people familiar” with the company’s plans, says the layoffs could involve at least 1,200 positions, or roughly a third of Lyft’s total headcount.
If so, this would follow 13% of workers being shown the door last November.
These are challenging times for Lyft, which has remained in rival Uber’s shadow since the company’s launch in 2012.
Uber now accounts for about three-quarters of ride-share rides. This clearly leaves little elbow room — and profitability — for Lyft.
Lyft’s stock has fallen by about 70% over the last year.
The company is by no means alone in tightening its belt. Tech companies have shed more than 170,000 positions this year amid economic uncertainty and the possibility of a recession.
But the prospect of firing a third of your underlings just days after taking the big chair — well, that’s not how any CEO wants to take the reins.
Risher told the Journal in a recent interview that one of his priorities as CEO is improving employee morale.
He may find that draconian layoffs don’t quite get the job done.