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A total of 3,500 customer service and recruitment employees were informed in a series of video calls last week that their jobs would be eliminated as the service struggles with the coronavirus shutdown. The Daily Mail first reported on the news and obtained the video.
“It's never easy or uncomplicated to let employees go, and that's only been more true during this unprecedented period, where we are all working from home across dozens of cities and countries,” an Uber spokesperson told FOX Business. “We've focused on providing the clearest, most empathetic experience, possible and have put together a strong severance package and other benefits.”
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Ruffin Chaveleau, head of Uber’s Phoenix Center of Excellence, said on the call that ride business is down by more than half. “There is not enough work for many front-line customer support employees. We are eliminating 3,500 frontline customer support roles.”
Acknowledging the situation, she continued: “I know that this is incredibly hard to hear. No one wants to be on a call like this. With everyone remote and a change of this magnitude, we had to do this in a way that allowed us to tell you as quickly as possible so that you did not hear it from the rumor mill. I also wanted to deliver this news personally and just take a brief moment to thank you for your contributions to Uber.”
Demand for rides has been shot in the COVID-19 pandemic as more Americans stay home. An Uber filing last Wednesday showed roughly 14 percent of its 26,900 employees could be cut.
The company posted a net loss near $3 billion last Thursday and said it would enact a hiring freeze. CEO Dara Khosrowshahi will forgo his salary the rest of the year.
In a statement last week, Khosrowshahi said while rides have “been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario.”
Plus, “we are encouraged by the early signs we are seeing in markets that are beginning to open back up,” he added. "Our global footprint and highly variable cost structure remain an important advantage, as our expectation is that the Rides recovery will vary by city and country.”
Since the cuts were made along customer support and recruiting, drivers will be mostly safe, the report said. Still, in a memo sent to staff last week, Khosrowshahi seemed to hint that more cuts could come: “We are looking at many scenarios and at each and every cost, both variable and fixed, across the company. We want to be smart, to move fast, to retain as many of our great people as we can, and treat everyone with dignity, support and respect.”
Uber shares were down more than 2 percent as of press time but up 14 percent in the last month.