Lyft Inc. is laying off 13% of its workforce, which amounts to 683 jobs, in what its executives are calling a proactive step as they look to a possible recession and plan for the coming year.
In a letter sent to staff Thursday morning by Lyft’s co-founders, Chief Executive Logan Green and President John Zimmer, and seen by MarketWatch, they detailed what they have tried to do to cut costs, including freezing hiring, plus pausing some initiatives. They say that wasn’t enough, and now they are calling the job cuts “proactive actions to ensure we can accelerate execution, stay focused on the best opportunities to drive profitable growth, and deliver strong business results in 2023 and beyond.”
which in July laid off 60 employees as it ended direct car rentals, said in a filing with the Securities and Exchange Commission on Thursday that it is not changing the financial guidance it issued when it reported second-quarter results. The company is scheduled to report third-quarter earnings Monday.
Lyft froze hiring through the end of the year in September, the company confirmed to MarketWatch at the time, and announced a much larger cut of nearly 1,000 workers early in the pandemic.
According to the letter the executives sent to the staff, the affected employees in Thursday’s action will receive 10 weeks of pay and accelerated vesting of their stock. Anyone who has been at the company for at least four years will receive an additional four weeks of pay. The layoffs are across teams, with about 25% of the cuts affecting employees in California, according to spokeswoman Jodi Seth.
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The executives also mentioned in their letter that they are seeking a buyer for the company’s first-party vehicle-services business, which was launched in 2019 to help ride-hailing drivers maintain and repair their vehicles.
The company’s moves come after it contributed about $45 million to a California ballot initiative, Proposition 30, which seeks to impose an additional tax on residents who make at least $2 million a year. That tax revenue would go toward the state’s electric-vehicle infrastructure — which is crucial for Lyft and rival Uber Technologies Inc.
as they seek to transition to electric cars because of a California mandate — and wildfire-prevention and suppression programs. According to a Berkeley Institute of Governmental Studies poll in early October, 49% of voters said they would vote yes, 37% would vote no and 14% were undecided.
In August, Lyft issued financial guidance that included a target of adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization, of $1 billion in 2024, with more than $700 million in free cash flow.
Shares of Lyft have declined 67% so far this year, compared with the S&P 500 index
which has fallen about 21% year to date. Lyft stock is up slightly, about 1.4% to $14.19, Thursday.
This story has been updated to include the exact number of employees affected.