Uber’s Newest Wave of Cost-Cutting Measures Ahead of Earnings
Uber announced Wednesday that it plans to take more actions to cut costs in regards to the COVID-19 pandemic, including layoffs and executive pay cuts.
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Uber Technologies Inc. (NYSE: UBER | UBER Price Prediction) announced Wednesday that it plans to take more actions to cut costs in regards to the COVID-19 pandemic. This includes layoffs and executive pay cuts.
In a filing with the U.S. Securities and Exchange Commission, the company noted that it plans to reduce its operating expenses in response to the economic challenges and uncertainty resulting from the ongoing pandemic and its impact on the business.
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The company detailed:
Due to lower trip volumes in its Rides segment and the Company’s current hiring freeze, the Company is reducing its customer support and recruiting teams by approximately 3,700 full-time employee roles. In connection with these actions, the Company estimates that it will incur approximately $20 million related to severance and other termination benefits. The Company is evaluating other cost and will provide an update in subsequent SEC disclosures regarding such amounts, if material.
Separately, CEO Dara Khosrowshahi has agreed to waive his base salary for the remainder of the year.
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Uber is expected to report its first-quarter financial results after the markets close on Thursday. The consensus estimates are calling for a net loss of $0.83 per share on $3.51 billion in revenue. The same period of last year reportedly had a net loss of $2.23 per share and $3.04 billion in revenue. Also, look for rival ride-hailing service Lyft, Inc. (NASDAQ: LYFT) to report after the markets close Wednesday.
Uber stock traded down about 4% to $27.00 on Wednesday, in a 52-week range of $13.71 to $47.08. The consensus price target is $38.02.
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Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
