Enlarge /. An Uber car in 2019.
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Uber is releasing 3,700 employees from its customer care and recruitment teams, the company said in a registration application submitted on Wednesday. This number corresponds to 14 percent of Uber's 26,900 employees, CNBC reports.
Uber has already frozen the hiring, and CEO Dara Khosrowshahi will waive his salary for the rest of the year, the company said.
The information reported last week that Uber's travel bookings were down 80 percent year over year. Uber tried to compensate for this by expanding its delivery business and launching two new services called Uber Connect and Uber Direct. But historically, rides were the largest part of Uber's business, making an 80 percent decline difficult to bear.
Last week, Uber's biggest rival in the US, Lyft, announced 1,000 layoffs – a 17 percent reduction in the company's workforce.
Three months ago. Uber predicted that it would be profitable by the end of 2020. Well, that's probably out of the question. We'll learn more when Uber announces its first quarter financial results tomorrow.
Uber is also facing a serious challenge for its California business model, where Attorney General Uber and Lyft sued on Tuesday for misclassifying its drivers as independent contractors. If Uber loses the lawsuit, the company will likely be forced to offer its drivers in California a number of new benefits, including minimum wage guarantees and reimbursement of operating expenses. The cost of providing these benefits makes Uber even more difficult to achieve profitability.