May 31, 2023

Ride-hailing company Lyft said it will lay off about 1,072 employees, or 26% of its workforce, in one of the first moves by new Chief Executive David Risher, who will increase his shares by about 1% on Thursday.

Risher, who took over earlier this month, had recently said the company will cut jobs “significantly”, without citing the number of jobs that would be affected.

Lyft will also close more than 250 open positions and incur approximately $41 million to $47 million in costs related to severance and employee benefits in the second quarter, it said in an exchange filing.

It will also incur additional costs associated with share-based compensation, which it believes cannot be estimated at the time.

The money saved from job cuts will be used to support “service-level improvements” for riders and drivers, Lyft said, promising to provide more details in its Q1 call on May 4.

This is the second round of job cuts from Lyft, which faces competition from larger rival Uber Technologies in a slowing economy. It had laid off about 683 employees by November, or 13% of its then-current workforce.

Uber and Lyft are emerging from pandemic lows and in a battle for market share, and investors are concerned that Lyft’s price cuts to avoid becoming a distant second in the North American ride-sharing market could hurt profits. to press.

A Lyft ride-hailing vehicle
CEO David Risher had said last week that the company will be cutting “significant” jobs.

Lyft’s stock has lost 8.6% of its value year-to-date compared to Uber’s 20% gain, as of Wednesday’s close.