Lyft Inc. CEO David Risher said on Friday the ride-hailing company will “significantly” cut jobs in another round of layoffs to reduce costs, sending its shares up about 4%.
According to sources familiar with the matter, Lyft Inc. will reportedly cut a minimum of 1,200 jobs in a further round of layoffs aimed at reducing costs, as reported by the Wall Street Journal on Friday.
The company declined to provide details on the number of affected staff, but the Wall Street Journal reported earlier in the day the move could impact 30% of Lyft’s workforce or more than 4,000 employees.
The decision comes weeks after the newly appointed CEO said Lyft was not for sale, disappointing some investors who had speculated that the exit of the company’s founders would pave the way for a deal and pushed up its stock last month.
The company in November laid off about 683 employees, or 13% of its then workforce, to cut costs and cope with stiff competition from bigger rival Uber Technologies Inc. in a tough economy.
The two companies have been locked in a battle for market share coming off the pandemic lows, and investors worry that Lyft’s price cuts to avoid being a distant second in the North American ride-sharing market would squeeze its profits.
The companies’ last reported results showed that Uber’s global presence and more diversified businesses were giving it an edge over U.S.-focused Lyft.
As of Thursday’s close, Lyft’s shares had experienced an approximately 11% decline in value, while Uber’s shares had gained 27.5%.
When this news broke on the internet, people associated with the company started worrying about the Lay-off. However, as per the reports, the layoff is due to the decline in the company’s shares. Its competition has gained more shares.