Latest layoffs: Lyft, Stripe more than decimate staff
While Elon may just dump half of Twitter and scrap work-from-home
Citing the likelihood of recession and increases in rideshare insurance costs, Lyft is laying off 13 percent of its workforce, with no team left unaffected.
In a letter to employees from CEO Logan Green and President John Zimmer, the pair said attempts to cut costs over the past year were insufficient to keep profits and results strong "in 2023 and beyond."
"We slowed, then froze hiring; cut spending; and paused less-critical initiatives. Still, Lyft has to become leaner, which requires us to part with incredible team members," Green and Zimmer wrote, as CNBC reported earlier today.
Lyft employs approximately 5,000 people, and that's not including the drivers, so 700 people are being chopped. Green and Zimmer said they made their layoff decisions based on deprioritized initiatives, plans to reduce management layers, broader savings goals "and, in some cases, performance trajectory."
Staff being thrown overboard will be given ten weeks of pay (employees with the company for four-plus years will get an extra four weeks), healthcare coverage through April 30, 2023, accelerated equity vesting, and assistance looking for a new job.
Green and Zimmer also said Lyft was pursuing the sale of its first-party vehicle service business, which a Lyft spokesperson told us involves vehicle service centers and a mechanic service that made house calls for Lyft drivers.
"Drivers continue to have access to exclusive benefits via the Lyft Rewards program, such as free 24/7 roadside assistance as well as discounts on auto services with our partnership with Openbay," the spokesperson said. Openbay is an online market where users can book auto service appointments.
Lyft said it expects the buyer for its self-service arm to hire most Lyft employees from that division, and as such didn't include them in the 13 percent number given by Green and Zimmer. Lyft didn't answer questions about the status of the sale, or if it was in discussions with a potential buyer.
Layoffs abound in Silicon Valley
News of layoffs at one tech company can't be covered without mentioning the other misery going on in Silicon Valley and beyond, where economic contraction has become the norm in 2022.
Elsewhere this week, online payment giant Stripe is laying off 14 percent of its staff, CEO Patrick Collison wrote in a note to employees. The layoffs are expected to affect around 1,100 people, CNBC said, and Collison noted that cuts won't be made evenly across the company, with recruiting teams hit hardest "since we'll hire fewer people next year."
Layoffs at Twitter following Elon Musk's takeover late last month are also expected to begin soon, but in this case it's far more than just a decimation plus a few percent: Musk allegedly intends to cut around half the app's workforce.
While no definite word on layoffs at Twitter has been made – unsurprising given that even Twitter employees are apparently being left in the dark – Bloomberg reported that people familiar with upcoming plans say the guillotine will be wheeled out tomorrow, November 4.
Musk is also apparently considering forcing Twitter's remaining workers back to the office in a reversal of Twitter's 2020 decision, and ex-CEO Parag Agrawal reiteration, of the company's policy to let workers work "wherever [they] feel most productive and creative." Ie, you don't have to come back to the office.
The decision to order employees back to their office desks is unsurprising coming from Musk, who earlier this year insisted Tesla employees work on-site, where they found poor Wi-Fi, a lack of parking spaces and desks, and general difficulty working, all due to a glut of pandemic hiring by the electric car maker leading to too many people in its offices.
"Everyone at Tesla is required to spend a minimum of 40 hours in the office per week. Moreover, the office must be where your actual colleagues are located, not some remote pseudo office. If you don't show up, we will assume you have resigned," Musk said in June.
There's evidence the return-to-office window in general may have already closed, and organizations continuing down that path, such as Twitter, could dig themselves into a deeper hole.
Leaders such as Musk want people back where they can supervise them, and they seem to largely be getting their wish, with many businesses reportedly likely to require workers in the office for at least a few days a week by next year. Coincidentally or not, the US Bureau of Labor Statistics said that in the first half of 2022 it recorded the largest drop in employee productivity since 1947. ®