Uber is cutting around 3,300 jobs worldwide as part of a major restructuring aimed at simplifying the company and reducing management costs. The announcement pushed Uber shares up by about 2.4% in Wednesday morning trading.
The job cuts are expected to affect roughly 10% of Uber’s global workforce, with management positions making up most of the reductions. The company said the number of managers will fall by around 20%. Some managers may also move into individual contributor roles instead of leaving the company.
Uber CEO Dara Khosrowshahi said the company had developed too many layers of management as it expanded over the years. According to an internal message reported by Bloomberg, he said structures that worked when Uber was smaller were no longer suitable for the company at its current size.
The restructuring will also target small teams. Uber plans to nearly halve the number of “micro-teams” that have only one or two direct reports. It will also reduce the number of employees positioned seven or more reporting levels below the CEO.
Several teams will be merged to make decision-making faster. Uber plans to streamline its engineering, science and delivery operations. Its three operations groups covering restaurants, retail and white-label delivery services will also be combined.
These layoffs are the company’s biggest since the Covid-19 pandemic. Uber had around 34,000 employees globally at the end of last year. In May 2020, the company cut about 6,700 jobs as the pandemic severely affected its business.
Unlike several other technology companies, Uber has not blamed artificial intelligence for the latest layoffs. Khosrowshahi said the move is primarily focused on removing unnecessary management layers, reducing coordination work and creating clearer responsibility across the company.
The restructuring is also expected to generate significant savings. Uber plans to redirect some of those savings into areas it believes can support future growth.
The company said it will invest more in its network of drivers, couriers and merchants, while continuing to strengthen its ride-hailing and delivery businesses.
Investors reacted positively to the announcement, with Uber shares rising after news of the restructuring emerged. The market response suggests investors view the move as a way for Uber to lower costs, improve efficiency and create a simpler organisational structure.
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