Uber Technologies, which is pursuing the acquisition of Delivery Hero, the operator of South Korea's leading food delivery app Baedal Minjok, will cut about 3,300 jobs, or 10% of its global workforce, including a 20% reduction in the number of managers. The savings will be reinvested in its ride-hailing, delivery and robotaxi businesses.
Chief Executive Dara Khosrowshahi announced the reorganization in an email to all employees, Bloomberg reported on the 2nd. Khosrowshahi said the company's growth in recent years had brought complexity along with it. "Layers have multiplied, coordination has increased and accountability has become diffuse," he said, adding that the structure "made sense when the business was smaller but no longer fits us at our current scale."
Uber said the move will reduce its number of managers by 20%, with some shifting into individual contributor roles. So-called micro-teams with fewer than two members will be cut by roughly 50%, and the number of employees more than seven levels below the CEO will be reduced by 20%. The cuts will also apply to non-managerial staff.
The company is also consolidating organizations. Chief among the changes is the merger of three delivery operations teams that had separately handled restaurants, retail and white-label delivery services. Bringing profit and loss under a single owner will reduce duplication and clarify accountability, the company said. On the technology side, Uber is combining its core services engineering and science organizations.
Working arrangements are changing as well. To increase in-person work at major sites, Uber will allow only about 1% of its total workforce to work remotely. It will also tighten enforcement of a hybrid policy requiring three days a week in the office.
Khosrowshahi said the changes will "generate savings to reinvest in growth, innovation and the capabilities that will matter most over the coming years." He stressed that Uber will increase investment in drivers, couriers and merchants worldwide, in addition to improving its core business and building toward an autonomous future.
Uber Channels $2 Billion in Savings Into Self-Driving Push
The move is part of a broader overhaul in which Uber has said it will commit more than $10 billion to robotaxi partnerships over the next several years. The aim is to turn its service into the leading platform for hailing self-driving vehicles. Over the past year, Uber has reallocated capital by trimming stakes in some companies while investing in Avride, Lucid Group, Nuro and Rivian Automotive.
Bloomberg Intelligence analysts said in a report that the job cuts could translate into annual cost savings of $1.5 billion to $2 billion. They cautioned, however, that "as investment in autonomous vehicles grows heavier, the near-term margin benefit from headcount reductions may be limited."
Uber had already carried out more narrowly targeted cuts in customer service and human resources earlier this year, and said in May that it would slow the pace of hiring. Unlike Big Tech peers that have conducted frequent layoffs citing heavy spending on artificial intelligence, Uber had avoided the large-scale workforce reductions of the pandemic era. The latest cuts will bring Uber's total headcount to just under 30,000, roughly in line with its 2021 level.
