Another day, another round of layoffs from a big tech company, as Lyft has officially cut 1,200 employees from its workforce to “better meet the needs of riders and drivers.”
It feels like there is no end in sight for the tech industry's obsession with layoffs, as the recession has pushed company after company to cut costs by firing employees. Sure, some tech CEOs have been able to avoid the trend by taking pay cuts, but even those companies are likely going to need to part ways with workers to keep costs low.
Now, it appears that everyone's favorite pink ride-share company has joined the fray, laying off a significant portion of its workforce in service of a “faster, flatter company.”
Lyft to “Significantly Reduce” Workforce
Announced in a note from the CEO of Lyft, the ridesharing company is planning to make significant cuts to its workforce by Thursday.
While the note didn't specify exactly how many employees would be getting the ax, the Wall Street Journal reported that as many as 1,200 workers would be cut in this round of layoffs.
“We need to be a faster, flatter company where everyone is closer to our riders and drivers so we can deliver on this purpose. And we need to bring our costs down to deliver affordable rides, compelling earnings for drivers, and profitable growth.” – David Risher, CEO of Lyft
Fortunately, Lyft is taking care of its laid off employees in a meaningful way, providing 10 weeks of severance pay and the opportunity to get more if you've worked at the company for more than four years. Additionally, all laid off employees get accelerated equity vesting and healthcare coverage until October 31st, 2023.
How Will Lyft Layoffs Help the Company?
With so many layoffs flying around, it can be easy to lose sight of the fact that these cost cutting measures do actually have a purpose beyond firing employees. Fortunately, the Lyft CEO was happy to provide a bit of insight into what exactly these layoffs were about and how they would keep the company competitive in the long run.
“We intend to use these savings to invest in competitive pricing, faster pick-up times, and better driver earnings. All of these require us to reduce our size and restructure how we’re organized.”
Studies have shown that despite rideshare companies like Lyft and Uber seeing a substantial price increases for riders, drivers have not seen the benefits in turn. Hopefully these layoffs will serve to make the rideshare ecosystem a bit more affordable for riders and lucrative for drivers, but that remains to be seen.
Other Tech Companies Making Layoffs
If you haven't heard about tech companies making layoffs in recent months, you likely just got out of a coma. The trend has been brutal for tech workers across the industry, with virtually every company under the sun cutting costs in a major way.
As for which companies are leading the charge in laying off more than 100,000 total tech employees in 2023, the likes of Meta, Google, Amazon, and Twitter have made some huge cuts, eroding trust in big tech that could have long-lasting impacts on the industry's ability to attract top talent.
If you're got a morbid sense of curiosity, follow our guide to the tech companies making layoffs in 2023 for more information.