Rideshare company Lyft said it is laying off 982 employees, or 17 percent of its workforce, and is furloughing hundreds more due to financial pressure from the Chinese virus pandemic.
The reductions, which were disclosed in an SEC filing on Wednesday, are part of a larger budgetary reduction that includes across-the-board base salary reductions for Lyft employees, with a 30 percent reduction for executives, 20 percent for vice presidents, and 10 percent for all other exempt employees.
Lyft said furloughs will impact approximately 288 employees. The company also said its board of directors has voluntarily agreed to forego 30 percent of their cash compensation for the second quarter of 2020.
The San Francisco-based Lyft said in its SEC filing that the cuts are intended to “reduce operating expenses and adjust cash flows in light of the ongoing economic challenges resulting from the COVID-19 pandemic and its impact on the Company’s business.”
It said the terminations will result in approximately $28 million to $36 million of “restructuring and related charges,” primarily related to employee severance and benefits costs.
Lyft’s disclosure comes a day after a report claimed that competitor Uber is considering layoffs of 20 percent of its workforce. The Information, a tech news outlet, said Uber hasn’t finalized plans but could announce the layoffs in stages in the coming weeks, with more than 5,400 of Uber’s 27,000 employees potentially losing their jobs.
The Chinese virus pandemic has resulted in an estimated 26 million lost jobs in the U.S. as businesses reduce their workforces or close altogether following stay-at-home orders from state governments.
Investors reacted positively to news of Lyft’s layoffs, with shares of the ridesharing company rising more than 5 percent during trading Wednesday.