NYSE-listed ride-hailing company Uber has been downsizing its global team amid mounting losses and investor attention. The cut down has trickled down to the Indian team as well.
A source close development confirmed to Inc42 that Uber India has less than 10% of 350 laid off employees. The development was first reported by ET. These are expected to impact Uber’s businesses in the country, including its online food-delivery vertical under UberEats.
It is to be noted that Uber has 2600 employees in India. On Monday, the company had emailed employees saying it would cull jobs of 350 people across the world and 70% of that will be in the United States and Canada. The source told Inc42 that less than 10% of these are from India.
The report further added that Uber’s Indian policy team has been shrinking consistently and most of the work is being outsourced to one of the big Indian law firms. Further, it has not yet been ascertained which department employees have been shown the door. Uber has been downsizing through the year. The first job cuts happened in July when staff from the marketing and analytics team were let go. The second round happened in September but did not affect India. However, product and technology positions were eliminated back then.
The source told us that the total layoffs (including these 350) across the three waves of layoffs for Uber globally is 1200, which is less than 1% of Uber’s global workforce.
It is being said that even though India contributes only 2% of Uber’s revenues, the country has been a larger part of expenses, and hence, can be a target of cost-cutting. On a global level, Uber reported a loss of $5.2 Bn in the second quarter of 2019, as compared to $3.7 Bn in the Q1 of 2019. The company attributed this loss to $298 Mn spent on driver appreciation award offered in connection with the company’s initial public offering, along with its $3.9 Bn spendings towards stock-based compensation expenses.
The development coincides with Uber CEO Dara Khosrowshahi’s scheduled visit to India later this month. However, the report added that his visit may not be directly connected with the layoffs.
Recently, Uber restructured its corporate holdings and brought its India business, including food delivery, under Uber India Systems. The report added that the rides business will also be invoiced out of India going forward. It said that the restructured business operations went live on October 1.
India’s ride-hailing industry is witnessing sluggish growth, averaging 3.65 Mn rides daily, a 4% increase over last year. At the same time, the company’s arch-rival Ola has been considering going public and hence, has intensified the path to profitability and growth.
Update: October 16, 2019| 4:25 PM
The story has been updated to include comments which said that India accounted for less than 10% of Uber’s global 350 staff layoffs. The earlier version of the story said that Uber India has laid off 10-15% of its employees.