As it struggles with a falling stock price and tough competition, ridesharing company Lyft has just announced drastic measures.
Lyft (LYFT) is terminating 1,072 employees, equating to roughly 26% of its staff, according to an April 27 SEC filing. In tandem with this, the rideshare company has cut back on hiring, eliminating more than 250 previously open positions.
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The news comes a week after CEO David Risher confirmed in a memo that layoffs were coming.
The layoffs come as part of a new restructuring plan which is designed to reduce the company’s operating costs.
Lyft said in the filing that this round of layoffs will run up a cost of at least $41 million in severance packages and employee benefits for the second quarter of the year. Lyft also anticipates incurring additional costs – which it cannot estimate at the time – related to stock-based compensation and payroll tax expenses.
Lyft "intends to use the operating cost savings associated with this action to support continued service-level improvements benefitting riders and drivers," it said in the filing. "The Company will provide more details on its first quarter of 2023 earnings call on May 4, 2023."
Shares of Lyft have fallen about 7.5% this year. The stock moved up in the wake of the layoff announcement. For more information on what TheStreet and Real Money columnists are saying about Lyft, please click here.
Shares of rival ride share company Uber (UBER) have risen 20.8% to $29.88 in 2023. The stock edged higher Thursday..
