In an SEC filing made earlier this week, ride-sharing service Lyft said that it would be making 988 staff members redundant, and 288 would be furloughed.
The move is an attempt to cut operating costs and overcome the economic downturn caused by the COVID-19 pandemic, CNBC reports.
According to the report, the staff reductions represent a 17% cut to the company‘s workforce. Those that have held on to their jobs will be subject to a 12-week salary cut starting in May. The company‘s executive leadership team will all take a 30% pay cut, vice presidents will take a 20% reduction, and all other employees will see their salaries temporarily reduced by 10%, Lyft said.
Lyft‘s decision to lay off staff to address the economic challenges associated with the drop in rider numbers caused by coronavirus lockdowns is not unique.
Ride-sharing firm and competitor Uber announced a similar SEC filing earlier this week.
Following the resignation of the company‘s CTO and longest serving executive, Uber said that it was discussing cutting 20% of its staff, putting more than 5,000 jobs.
The coronavirus pandemic and associated lockdown measures have caused a drop in user numbers for apps like Uber and Lyft. With that in mind, layoffs and pay cuts shouldn’t come as a surprise.
Research conducted by US automotive industry analysts, CarGurus, found that 39% of people are likely to stop or reduce their use of apps like Uber and Lyft when lockdown measures are lifted.
While times might be challenging for ride-sharing firms right now, that’s unlikely to change any time soon.