Uber lays off more than 3,000 workers as Silicon Valley's implosion continues

Uber has joined a number of other Silicon Valley companies in laying off large chunks of its workforce

By Matthew Rozsa

Staff Writer

Published May 18, 2020 6:59PM (EDT)

Uber Technologies headquarters in San Francisco, California. (Liu Guanguan/China News Service via Getty Images)
Uber Technologies headquarters in San Francisco, California. (Liu Guanguan/China News Service via Getty Images)

Ride-hailing giant Uber announced Monday that it is laying off 3,000 more workers, a decision made less than two weeks after a previous round of cuts hit 3,700 employees at the corporation.

"Our balance sheet is strong, [Uber] Eats is doing great, Rides looks a little better, maybe we can wait this damn virus out...I wanted there to be a different answer," CEO Dara Khosrowshahi told employees in the email Monday, according to CNBC. "Let me talk to a few more CEOs...maybe one of them will tell me some good news, but there simply was no good news to hear. Ultimately, I realized that hoping the world would return to normal within any predictable timeframe, so we could pick up where we left off on our path to profitability, was not a viable option."

Khosrowshahi attempted to reassure the affected employees by adding that the company would work to provide strong severance benefits, healthcare coverage, an alumni talent directory and other forms of support for those harmed by the layoffs. His letter expressed sadness for the decision but characterized it as necessary because of "the unpredictability of the world from the punch-in-the-gut called COVID-19."

As of 1:50 PM ET, Uber's stock had risen by 7 percent, according to The Motley Fool — likely in response to the company's May layoffs, which have reduced the company's previously 26,900-strong workforce by roughly a quarter as well as led to the closure of 45 offices. Khosrowshahi's email did not mention reports that the company is trying to buy Grubhub, a food ordering and delivery service, which would help the company more effectively compete with rival DoorDash as well as offset some of its recent financial losses.

Uber is not the only Silicon Valley giant to lay off workers due to the pandemic. Job marketplace ZipRecruiter laid off 443 employees and furloughed dozens more on March 27. Online travel company TripAdvisor laid off more than 900 of its employees, or roughly 25 percent of its workforce, on April 28. Ride-sharing company Lyft laid off 982 employees and furloughed another 288, or roughly 17 percent of its workforce, on April 29. Vacation rental platform Airbnb laid off 1,900 employees, or roughly 25 percent of its workforce, on May 5.

When Khosrowshahi mentioned creating an "alumni talent directory," he was referencing an idea that made news earlier this month courtesy of Airbnb. When CEO Brian Chesky announced his layoffs in a letter to employees, he said that he was creating an alumni talent director as one of "five ways" that they could help the hurt former employees. Chesky described it as "a public-facing website to help teammates leaving find new jobs. Departing employees can opt-in to have profiles, resumes, and work samples accessible to potential employers."

In addition to the alumni talent directory, Chesky promised to use "a significant portion of Airbnb Recruiting" to help former employees get new jobs, provide departing employees with four months of career assistance through a career transition and job placement service called RiseSmart and allowing the terminated workers to keep their Apple laptops.

One recently laid-off Airbnb employee, who preferred to speak anonymously for fear of retribution, was skeptical that the company's decision to keep their work laptops was made out of compassion. "They are spinning it like they are just being kind, but it would be a logistical nightmare to get all those laptops back from across the world," the employee told Salon, noting that many Airbnb workers are remote. "Plus getting people to assess, document, and refurbish them would be hard when all of IT [Information Technology] is working remote. It's a 'juice not worth the squeeze' situation."

Not all Silicon Valley companies have suffered because of the pandemic. Amazon announced last month that it had posted $75 billion in its first quarter, although its profits fell 29 percent from one year earlier to $2.5 billion. CEO Jeff Bezos said that the company plans on spending $4 billion in the upcoming quarter on expenses related to the coronavirus, including keeping employees safe and getting products safely to customers. The company also says that it will spend hundreds of millions on COVID-19 tests so that its employees will be able to safely work.

Yet Amazon has been criticized, however, for not disclosing the number of employees who have died from COVID-19. Operations boss Dave Clark told CBS earlier this month that the company would not release the numbers because "the actual sort of total number of cases isn't particularly useful because it's relative to the size of the building and then the overall community infection rate." 

CNBC tech editor Steve Kovach argued last week that Amazon has a moral responsibility to inform the public of how many of its workers, who he described as "heroes," have died because of the pandemic.

"Our notion of an 'essential worker' has dramatically changed since the start of the pandemic," Kovach wrote. "It's not just doctors, nurses, police officers, firefighters and members of the military. In the time of the coronavirus, the definition has expanded to include sanitation workers, grocery store clerks, food-delivery workers and warehouse workers who ship goods ordered online."

By Matthew Rozsa

Matthew Rozsa is a staff writer at Salon. He received a Master's Degree in History from Rutgers-Newark in 2012 and was awarded a science journalism fellowship from the Metcalf Institute in 2022.

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Aggregate Airbnb Amazon Coronavirus Covid-19 Lyft Silicon Valley Tripadviser Uber Ziprecruiter