Ride-hailing company Lyft plans to cut 13% of its more than 4,000-person staff as it prepares for a coming economic recession.
The cuts are expected to affect hundreds of its non-driver employees and come just months after the company cut 60 employees in July. The San Francisco-based company also plans to sell its first-party vehicle service business and expects those employees to be offered jobs at the acquiring company.
“It was important to take these proactive actions to ensure we can accelerate execution, stay focused on the best opportunities to drive profitable growth, and deliver strong business results in 2023 and beyond,” wrote Ashley Adams, a member of Lyft’s corporate communications team, in an email to The Standard.
Lyft isn’t the only company worried about a coming economic nosedive.
Stripe, the payments unicorn that was valued at $74 billion earlier this year, has also announced major job cuts impacting around 1,120 workers of the company’s 8,000-strong workforce.
In a note shared with Stripe employees and posted on the company’s website, Stripe CEO Patrick Collison attributed the layoffs—which impact about 14% of employees—to macroeconomic factors like inflation, higher interest rates and declines in venture funding.
He noted that the company’s recruiting division will be particularly impacted by the cuts and said other cost reductions were also forthcoming.
While the company saw major growth during the first two years of the pandemic as e-commerce activity exploded, Collison wrote that Stripe made “two very consequential mistakes” in underestimating the potential for a broader economic slowdown and growing operating costs too quickly.
“We think that 2022 represents the beginning of a different economic climate,” he wrote.
Lyft and Stripe are just two examples of local tech companies preparing for leaner times.
Major employers in the city, such as Salesforce, Okta and Twilio, have also cut staff in recent months.
Twitter is also expected to make drastic staff cutbacks in the wake of its $44 billion acquisition by billionaire Elon Musk.
Those layoffs, which could affect 3,700 employees at the San Francisco-based social network, will reportedly begin on Friday.
Kevin Truong can be reached at email@example.com