Lyft Inc. will eliminate about 90 jobs as the unprofitable ride-hailing company seeks to deliver on a promise to stop losing money by the end of next year.
The dismissals represent about 2 per cent of employees and affects the marketing and sales departments. The San Francisco-based company said despite the cuts, it intends to hire more than 1,000 people this year.
“We’ve carefully evaluated the resources we need to achieve our 2020 business goals, and the restructuring of some of our teams reflects that,” Alexandra LaManna, a spokeswoman for Lyft, said in an emailed statement. The New York Times reported the cuts earlier Wednesday.
Lyft has struggled since going public last year. Like Uber Technologies Inc., Lyft built a multibillion-dollar business by heavily subsidizing the cost of rides for customers and offering bonuses to drivers. Both companies have reduced those subsidies in recent months as a response to increased pressure from investors to turn a profit.
Uber, the most-used ride-hailing app in the U.S., embarked on a larger workforce reduction last year, when it eliminated more than 1,000 jobs. The two companies are also battling a new California law that seeks to reclassify their drivers as employees instead of independent contractors. Some analysts have estimated the change could result in price hikes of as much as 30 per cent.
Lyft plans to report 2019 financial results on Feb. 11. It previously said it expects 2019 revenue to be US$3.57 billion to US$3.58 billion, citing increased ridership. The company has pledged to turn an adjusted profit, excluding taxes and other expenses, by the fourth quarter of 2021.
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