Uber is laying off 10% of its corporate workforce and joining other tech companies cutting through management layers.
The taxi company’s move will eliminate about 3,300 positions, the company said Wednesday.
The job cuts focused on management and coordination functions, CEO Dara Khosrowshahi wrote in a memo to employees. While Uber’s recent financial results have largely exceeded analyst expectations, the company has become more complex over the past five years, Khosrowshahi writes.
“We have reduced roles primarily focused on coordination and clarified the remit of the remaining coordination roles,” he wrote.
Uber also “reduced the number of management layers by broadening the scope of managers,” Khosrowshahi wrote. The layoffs were previously reported by Bloomberg News.
The layoffs are the latest example of a tech company focusing on this goal jobs of managers to save money. From Meta to Coinbase, other companies have cut back on such roles or asked managers to produce themselves – often with the help of AI.
Uber’s announcement on Wednesday made no mention of AI. However, Khosrowshahi did point to examples of reducing layers of management, from combining teams responsible for delivery operations to eliminating about half of the teams with one or two direct reports – a setup Uber calls a “micro team.”
Uber is also asking almost all of its employees to return to the office at least three days a week, Khosrowshahi writes. Less than 1% of Uber’s workforce will remain remote, he added.
The layoffs are the latest round of job losses for Uber, which cut roles in customer service and HR earlier this year. In July, the company laid off 10% of its customer service team, citing increased use of AI.
Read the memo Khosrowshahi sent to Uber employees:
Team,
Today we are making some important organizational changes within Uber. We’re removing layers, simplifying team structures, refining our global location strategy, and focusing our people and investments on the biggest opportunities ahead. As a result, we will reduce the size of our team by approximately 10%. Anyone whose role is affected has already been notified, except in countries where we will follow the required local procedure.
This was not a decision we made lightly, as 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 are organized and what we prioritize, not about anyone’s contributions to Uber, which we will always value.
I’m sure you’re wondering, ‘Why, and why now?’, especially since our company is performing so well. Over the past five years, Uber has grown tremendously, nearly tripling our revenue. We’ve built new products, expanded into new businesses, reached more consumers and supported more earners, and become a much bigger 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 companies were smaller but no longer serve us well at our current scale.
Our opportunities from here are enormous: we have the chance to bring Uber to hundreds of millions more people; to invest even more in drivers, couriers and traders; and to innovate in our core activities and build the autonomous future.
To do these things, we must make informed choices about where we place our people, our time and our capital.
The changes we’re making today are intended to accomplish two things: make Uber simpler and faster, and create more capacity to invest in our future. A leaner organization means clearer ownership, faster decisions and more time spent building instead of coordinating. It will also generate savings that we plan to reinvest in growth, innovation and the capabilities that will matter most in the years to come.
It is our job as leaders to make these difficult decisions and give you transparency into our thinking and decision-making process. This is what we do and why:
- Organizational Health: From Pulse surveys and conversations with many of you, we’ve heard that too much work requires coordination between teams, debates take too long, and decision-making rights are unclear. I’m sure many of you have felt like you’re spending too much time “tuning” rather than building, shipping, or serving customers. To improve this, we have reduced the roles primarily focused on coordination and clarified the remit of the remaining coordination roles. We also reduced the number of management layers by broadening the scope of managers, especially where we had ‘micro-teams’ of just one or two reports. Overall, we reduced the number of employees with seven or more levels from the CEO by 20% and the number of micro-teams by almost 50%. The result is a simpler organizational chart, focused on building versus managing.
- Team Simplification: We brought teams together where fragmentation caused duplication and delayed decisions. The key example of this is Mac’s decision to combine our three current Delivery Ops teams (in Restaurants, Retail and Direct) into single-threaded teams at the global, regional and country levels. Running these three businesses separately made sense in the early days, but that structure is no longer suitable for us at scale. Consolidating the income statements under a single owner 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 are combining our Core Services Engineering and Science teams, following the structure we already have in Mobility and Delivery.
- Location strategy: The benefits of sitting together, working together in person and solving problems as a team are clearer than ever in our post-Covid world. With that in mind, we’re setting clearer principles for where roles and teams should be based, with the aim of concentrating teams into 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 technical teams in technical hubs. Where possible, we prioritize co-location between managers and their teams, especially for employees in earlier careers. We are also asking the vast majority of remote workers to move into an office, and only ~1% of employees will work remotely in the future. We will also continue to strengthen compliance with our hybrid work policy, which requires us to be in the office three days a week. 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 change instead of several small ones. We also know that organizational change can be extremely distracting, and our job is to create an environment where you can focus and do your best work. Now that these decisions have been made, we focus on the future.
We have tremendous momentum, significant financial capacity and opportunities ahead of us that are greater than at any time since I joined the company. The decisions we make today are difficult, but they will help us build an even stronger Uber for years to come.
You can read more about the changes across the business here, and make sure you read the specific follow-up information you’ll receive from your leaders on what this means for your team so we can all continue to build together.
Uber on,
Dara
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