The coronavirus pandemic has affected almost all kinds of businesses worldwide. While disheartening, it doesn’t really come as a surprise. Companies are being forced to let employees go, make salary cuts or announce furloughs. Most people are currently staying at home and practising self-isolation. The direct result of this is a blow to the mobility and micro-mobility industry, who are reporting a massive dip in the usage of their services. Some prominent names in this industry like Lime, Uber and Lyft too are now announcing jobs and pay cuts to stay afloat.
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E-scooter startup Lime to layoff 13 percent of its workforce
Lime is one of the hardest-hit companies during the COVID-19 pandemic. It previously had to cut 100 jobs in January to become profitable and now, the pandemic is forcing the company to again let go of 80 people or about 13 percent of its current workforce. The company’s co-founder and CEO, Brad Bao made the announcement via a letter to the workforce, which was released on the company’s blog post.
“We have made the very difficult decision to reduce our workforce today,” Bao’s statement to Business Insider reads. “The world changed overnight, impacting the lives of our employees, riders and the very communities we love and serve. We are taking these necessary steps to ensure long-term resilience of the business so that we remain a safe and reliable transportation option for cities around the world as we come out of this crisis.”
In his letter, Bao also said that Lime was nearing the milestone of being the first next-generation micro-mobility company to reach profitability. However, it had to pause operations in 99% of its markets worldwide.
Lyft announces lays off, furloughs and pay cuts
Lyft used to be one of the most used ride-hailing apps before the pandemic hit. Now, it has ceased operations almost everywhere it used to operate. The company is also announcing layoffs to “reduce operating expenses and adjust cash flows in light of the ongoing economic challenges resulting from the COVID-19 pandemic,” according to an SEC filing by the company.
Lyft’s workforce of 5,800 people will be affected by the decision. The filing also mentions remaining employees of the company will get reduced salaries for 12 weeks, starting May. Company’s top execs should expect a 30 percent pay cut, while vice presidents may bear 20 percent cuts, and all other employees will apparently have a 10 percent reduction in pay. Lyft’s board members agreed to voluntarily give up 30 percent of their “cash compensation” for Q2, as per the SEC filing submitted by the company’s CFO, Brian Roberts.
Uber rumoured to announce layoffs
Lyft is not the only ride-hailing app affected deeply by the COVID-19 pandemic. It’s primary competitor Uber is reportedly in plans to lay off 20 percent of its current staff. If true, the cost cutting move would involve about 5,400 Uber employees to be let go. The news also comes soon after Uber CTO and longest serving top executive, Thuan Pham, announced he is stepping down.
Even though the times are tough right now, it goes without saying that the situation is bound to get better with time. After COVID-19, mobility and travel companies are highly likely to bounce back stronger than before. During that time, they will require resources since people will commence travelling as soon as the lockdown ends. Considering this, layoffs don’t seem to be the best plan of action right now. What do you think about the scenario? Let us know in the comments.
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