Uber layoffs: CEO Dara Khosrowshahi to cut 10% of staff to simplify business. Read full memo

Uber is cutting 10% of its global workforce to flatten organisational layers, CEO Dara Khosrowshahi said in a memo.

Uber is laying off 10% of its global workforce. According to a memo sent to the employees by CEO Dara Khosrowshahi, the company took this decision to “remove layering” and simplify “team structures”.

CEO of Uber, Dara Khosrowshahi, speaks during an event at the White House. (REUTERS)

The CEO said that the reduction of nearly 3,300 positions will help the company to invest more in drivers, couriers and merchants. He continued that the decision would steer the company more towards building rather than just managing.

Read the full memo by CEO Dara Khosrowshahi:

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 will 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

Social media reacts:

From expressing disbelief to sharing stories of layoffs, people reacted to the news in different ways.

An individual posted, “Today has been a difficult day at Uber. Some exceptional product designers (also my friends) who I highly recommend were impacted by this layoff. If you’re hiring product designers, please reach out. I’d love to help connect them with their next opportunity.”

Another added, “Bro, when will these layoffs stop? Even talented engineers are getting laid off.” A third commented, “10% of total. AI was not mentioned as a reason. They’re also effectively removing remote working entirely.”

A fourth wrote, “And this is before Robotaxi hit the market.” The individual referred to an earlier report about Uber’s plan to spend more than $10 billion on robotaxis over the years.