Uber Layoffs: CEO Dara Khosrowshahi Says “This wasn’t a decision we made lightly” as company cuts 3,300 jobs globally

Uber Technologies is cutting around 3,300 jobs globally, or roughly 10% of its workforce, as part of a major restructuring aimed at reducing management layers and redirecting spending towards ride-sharing, delivery and autonomous driving businesses.

The layoffs were announced on Wednesday in a companywide email from CEO Dara Khosrowshahi. He described the move as an effort to simplify an organisation that had developed too many layers between decision-makers and teams building products. Most employees affected by the cuts have already been informed, except in countries where local labour laws require a longer consultation process.

Khosrowshahi’s companywide email in full:


Team, Today, we’re making a number of significant organizational changes across Uber. We are removing layers, simplifying team structures, refining our global location strategy, and focusing our people and investments against the biggest opportunities ahead of us. As a result, we will be reducing the size of our team by about 10%. Everyone whose role has been affected has already been notified, except in countries where we will follow the required local process.

This wasn’t a decision we made lightly, because it will have a real impact on our teammates and friends who have worked hard for Uber. It’s important to say that these changes are about how we’re organized and what we’re prioritizing, not about anyone’s contributions to Uber, which we always value.

I’m sure you’re asking, ‘Why, and why now?’—particularly since our business is performing so well. Over the last 5+ years, Uber has grown by orders of magnitude, with our top line nearly tripling. We’ve built new products, expanded into new businesses, reached more consumers and supported more earners, and become a much larger and stronger company. But that growth has also brought complexity: more layers, more coordination, more fragmented ownership, and in some cases structures that made sense when businesses were smaller but no longer serve us well at our current scale.

Our opportunity from here is enormous: we have the chance to bring Uber to hundreds of millions more people; to invest even more in drivers, couriers and merchants; and to innovate across our core businesses and build the autonomous future. To do those things, we need to make deliberate choices about where we put our people, our time, and our capital.

The changes we’re making today are designed to do two things: make Uber simpler and faster, and create more capacity to invest in our future. A leaner organization will mean clearer ownership, faster decisions, and more time spent building rather than coordinating. It will also generate savings that we intend to reinvest in growth, innovation, and the capabilities that will matter most over the coming years.

It’s our job as leaders to make these difficult calls, and to give you transparency into our thinking and our decision-making process. Here’s what we are doing and why:

Organizational health: In Pulse surveys and conversations with many of you, we’ve heard that too much work requires coordination across teams, debates take too long, and decision-making rights are unclear. I’m sure many of you have felt that you spend too much time “aligning” rather than building, shipping, or serving customers. To improve this, we have reduced roles primarily focused on coordination, and have clarified the remit of the coordination roles that remain. We also cut down the number of management layers by broadening manager scopes, particularly where we had “micro-teams” of only 1-2 reports. In all, we’ve reduced the number of employees who sit 7+ layers from the CEO by 20% and the number of micro-teams by nearly 50%. The outcome is a simpler org chart geared toward building versus managing.

Team simplification: We brought together teams where fragmentation was creating duplication and slowing decisions. The most significant example of this is Mac’s decision to combine our three current Delivery Ops teams (across Restaurants, Retail, and Direct) into single-threaded teams at the global, regional, and country levels. Running these three businesses separately made sense in their early days, but that structure is no longer serving us at scale. Bringing the P&Ls together under single owners will reduce overlap, clarify accountability, and allow GMs to allocate capital more efficiently and effectively based on their strategic imperatives. Another example of this: in Tech, we’re combining our Core Services Engineering and Science teams, mirroring the structure we already have on Mobility and Delivery.

Location strategy: The benefits of sitting together, collaborating in person, and solving problems as a team are clearer than ever in our post-Covid world. With that in mind, we’re establishing clearer principles for where roles and teams should be based, with the goal of concentrating teams in a smaller number of key hubs. Global teams will be concentrated in our largest global hubs, NY and SF; regional teams in designated regional hubs; local teams in country hubs; and tech teams in tech hubs. We’ll prioritize co-location between managers and their teams wherever possible, particularly for earlier-career employees. We are also asking the vast majority of remote employees to move to an office, and going forward, only ~1% of employees will be remote. We’ll also continue to reinforce compliance with our hybrid work policy, which requires three days a week in the office. You can read more about our location strategy here.

I realize this is a lot of change, but we decided it was better to make one big shift rather than multiple small ones. We also know organizational changes can be hugely distracting, and our job is to create an environment that allows you to focus and do your best work. With these decisions now made, our focus is on the future.

We have tremendous momentum, significant financial capacity, and opportunities in front of us that are larger than at any point since I joined the company. The decisions we’re making today are difficult, but they will help us build an even stronger Uber for the years ahead.

You can read more about the changes across the company here, and please be sure to read specific follow-up information you’ll receive from your leaders about what this means for your team, so we can all keep building together.

Uber on,

Dara

Uber to Reduce Management Layers

Uber's restructuring is focused on changing the company's organisational structure rather than targeting a particular business division.

The number of managers will fall by about 20%, with some managers being moved into individual contributor roles instead of being laid off. The company will also reduce the number of employees positioned seven or more reporting levels below the CEO by 20%.

Uber is also cutting back on "micro-teams" made up of just one or two employees, with their number expected to fall by nearly half.

Non-management employees will also be affected as the company combines teams where it believes separate structures are no longer necessary.

Delivery and Engineering Teams to Be Combined

Uber plans to merge its three delivery operations groups covering restaurants, retail and its white-label direct service into teams with a single owner at the global, regional and country levels.

The technology organisation will also undergo changes, with Core Services Engineering and Science being combined. The move follows a similar structure already used across Uber's Mobility and Delivery businesses.

Uber Plans to Reduce Fully Remote Roles

The company is also changing its approach to remote work.

Global teams will be concentrated in New York and San Francisco, while regional teams will operate from designated regional hubs and technology teams from tech hubs. Most employees currently working remotely will be asked to return to an office. Going forward, only around 1% of Uber's workforce is expected to be fully remote. The company's existing three-day-a-week hybrid work policy will remain in place, although Khosrowshahi said compliance with the policy would be reinforced.

Robotaxi Investment Behind Uber's Restructuring

Uber said the savings generated from the restructuring will be redirected towards growth and its autonomous driving ambitions.

The company has committed more than $10 billion to robotaxi partnerships over the coming years and has been adjusting its investments to support the sector.

Uber Layoffs Come Despite Strong Business Performance

The latest layoffs are notable because they come at a time when Uber's business is performing well, rather than during a major downturn.

Uber had around 34,000 employees at the end of last year. Following the latest cuts, its workforce will fall to just under 30,000, bringing staffing levels close to where they were in 2021. The company's biggest previous round of layoffs came in May 2020, when about 6,700 employees were let go as pandemic lockdowns caused ride demand to collapse.

[With TOI inputs]