Lyft, which is struggling financially as it tries to compete with its rival Uber, said Friday it planned to cut major jobs.
The layoffs, expected next week, will affect some 1,200 people, according to a person with knowledge of the matter. It is the first major move by David Risher, the company’s new CEO. Mr Risher had been considering the cuts for several weeks, the person said, even though his first official day as the company’s CEO was on Monday.
“We need to reduce our costs to provide affordable rides, attractive driver income and profitable growth,” Mr. Risher said in a note to employees. He added that the money saved from the downsizing would be used to “invest in competitive pricing, faster pick-up times and better driver revenue.”
Mr. Risher said employees would be notified next Thursday if they lost their jobs, and that Lyft’s offices would be closed that day.
News of job cuts at Lyft, which has about 4,000 employees, was previously reported by The Wall Street Journal.
“This is a difficult decision, one we don’t take lightly,” Sona Iliffe-Moon, a Lyft spokeswoman, said in a statement. “But the result will be a much stronger, more competitive Lyft.”
Lyft announced in March that Mr. Risher, a former Amazon and Microsoft executive who served on Lyft’s board of directors, would take over from John Zimmer and Logan Green, the company’s founders. Both men are stepping down from their leadership positions, but will remain with the company as members of the board of directors.
Lyft has long been a distant second to Uber, which has emerged from the pandemic in a stronger position, in part because of its investment in food delivery and a global ride-hailing business.
In November, Lyft laid off 13 percent of its staff. In February, the company reported record sales but warned it would be slowed by economic challenges as it worked to lower prices. Mr. Risher has said keeping prices competitive will be an important part of his strategy to differentiate Lyft from Uber.
Lyft employees had been anticipating layoffs for months. Business consultants had been called in to ask departments to justify their budgets and make recommendations for cost savings, three current and former employees said, and business leaders had hinted all spring that more employees could lose their jobs.
Employees expected the layoffs to take place in mid-April, before managers were scheduled to write annual performance reviews and executives had to decide on compensation for the year.
