Uber announced an additional round of layoffs on Tuesday, this time by its product and engineering teams. A total of 435 people were employed, or about 8 percent of the company's total workforce. The news first reported by TechCrunch comes months after Uber said it would lay off 400 employees from its marketing department.
This latest round of layoffs comes after a brutal second quarter for Uber, with the company missing out on its revenue forecasts and reporting a record $ 5.2 billion net loss. In August, Uber confirmed that it had imposed a freeze on new software engineers and product managers, but now ̵
"Our hope with these changes is to restore and improve the way we work day to day – ruthlessly prioritizing and always holding ourselves accountable to the high performance bar and agility, "an Uber spokesman said in a statement. "While it is certainly painful at the moment, especially for those directly concerned, we believe that this will lead to a much stronger technical organization that will continue to hire some of the best talent around the world. "
In July, Uber released 400 people from its marketing team, many of whom worked in regional offices around the world. This latest round also affects regional offices, with 85 percent of those fired working in the US, 10 percent in the Asia Pacific region and 5 percent in Europe, the Middle East and Africa.
But even as it cuts costs in its marketing, engineering and product divisions, Uber is increasing costs in other areas. The company said it will spend $ 200 million a year to grow its two-year freight business, which includes hiring up to 2000 new employees in three years.
Uber also plans to spend resources to counter the anticipated passage of California state law that would make it difficult for giant economy companies to classify workers as independent contractors. Uber and rival Lyft say they will team up to spend $ 60 million to fund an initiative newsletter in the state to create a new driver classification.
If passed, California Assembly Bill 5 could force Uber and Lyft to designate drivers as employees, a move that both companies recognize could put them at a financial misstep. Experts estimate that labor costs could increase by 30 percent for Uber in the state if AB5 is adopted.