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Lyft’s recently appointed CEO, David Risher, has informed employees via email that the company will be implementing significant workforce reductions as part of a restructuring plan. Risher stated that this move is aimed at better meeting the needs of riders and drivers, and the company has confirmed that it has not revised its first quarter guidance despite the upcoming layoffs. While it remains unclear how these changes will impact other programs such as bike-sharing, the layoffs will affect the company’s over 4,000 full-time employees, and notifications regarding job status will be sent out on April 27th via email.
Lyft has not disclosed the exact number of employees to be laid off, but according to an unnamed source cited in a WSJ report, approximately 1,200 workers, accounting for 30% of the total workforce, will be affected. Risher, a former executive at Amazon, took over as CEO after Lyft’s co-founders stepped down last month.
In his email, Risher emphasized that the decision was made to help the company achieve its core purposes of providing reliable transportation options for riders and empowering drivers to earn income on their terms. He stated that Lyft needs to become a faster and more agile organization, closer to its riders and drivers, in order to deliver on these purposes while also bringing down costs to offer affordable rides, better earnings for drivers, and profitable growth. The company intends to use the savings from the workforce reduction to invest in competitive pricing, faster pick-up times, and improved driver earnings.
This restructuring move may not come as a surprise to industry observers, as Lyft has been facing challenges in keeping up with its rival Uber. In a late March interview with Grey Journal, Risher hinted at potential changes to Lyft’s business model, including the possibility of dropping shared rides and discontinuing other products and services such as Wait & Save, which offers lower fares to riders who wait for the best-located driver in certain regions. Risher noted that it may be time for Lyft to prioritize its core ride-hailing business and streamline its offerings to ensure profitability.
Overall, Lyft’s decision to implement significant workforce reductions as part of its restructuring effort reflects its commitment to adapting to market dynamics and optimizing its operations to better serve the needs of its riders and drivers while striving for profitability in a highly competitive industry.