Uber CEO Dara Khosrowshahi said in a recent email to staff that the company will be “hardcore” about cutting spending on marketing and incentives and will treat hiring new employees as a “privilege.”
CNBC reports that according to Uber CEO Dara Khosrowshahi, the company will be cutting back on spending and focusing on becoming leaner due to a “seismic shift” in investor sentiment. The news came in an email to employees obtained by CNBC.
Khosrowshahi said in the email sent on Sunday: “After earnings, I spent several days meeting investors in New York and Boston. It’s clear that the market is experiencing a seismic shift and we need to react accordingly.”
Tech stocks have taken a major hit after reaching all-time highs during the coronavirus pandemic as investors worry over the prospect of an end to a long-running bull market. The Nasdaq Composite recorded its fifth consecutive week of declines last week, marking its longest losing streak since 2012. The shares of Uber competitor Lyft fell by 30 percent in one day following gloomy guidance caused by gas prices and other market headwinds.
In an attempt to address this issue, Uber will be cutting spending on marketing and incentives. “We have to make sure our unit economics work before we go big,” Khosrowshahi said. “The least efficient marketing and incentive spend will be pulled back.”
He added: “We will treat hiring as a privilege and be deliberate about when and where we add headcount. We will be even more hardcore about costs across the board.”
Uber shares fell by more than six percent in intraday trading on Monday with the company’s stock falling more than 40 percent year-to-date. Khosrowshahi said that the company will now be focusing on achieving profitability on a free cash flow basis rather than adjusted earnings before interest, taxes, depreciation, and amortization.
“We have made a ton of progress in terms of profitability, setting a target for $5 billion in Adjusted EBITDA in 2024, but the goalposts have changed,” Khosrowshahi said. “Now it’s about free cash flow. We can (and should) get there fast.”
Uber is well known for its wokeness. In one recent case, the company pledged to support its drivers in the face of the Texas abortion law.
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address firstname.lastname@example.org