Uber cuts 3,700 jobs, CEO forgoes salary as coronavirus keeps riders home

CNBC's Deirdre Bosa reports on job cuts at Uber as the company grapples with the coronavirus pandemic.

Uber said Wednesday it will lay off 3,700 employees and that CEO Dara Khosrowshahi will forgo his base salary for the rest of the year.

The layoffs to its customer support and recruiting teams represent about 14% of its 26,900 employees, based on Uber’s most recent headcount.

Khosrowshahi made $1 million in base salary in 2019 but gained the vast majority of his compensation from bonuses and stock awards.

The moves were announced in a filing with the Securities and Exchange Commission.

Uber’s stock was down more than 2% Wednesday.

Uber has been hit hard by the coronavirus pandemic, which has crushed the travel industry because of lockdowns to stop the spread of the virus. Uber’s global gross bookings are down 80%, according to a report from The Information last month. Investors will get a greater sense of the impact on Thursday when Uber reports earnings.

Khosrowshahi hinted in a memo to employees Wednesday that more cost cuts are on the way.

“We are looking at many scenarios and at each and every cost, both variable and fixed, across the company,” Khosrowshahi said. “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.”

Khosrowshahi said Uber would give employees “a further, final update” within two weeks.

Uber’s drivers have suffered from lost income, reigniting the debate around whether Uber should be able to classify them as contractors. Khosrowshahi advocated to President Donald Trump for a “third way” of classifying workers beyond contractors and employees, while pushing for gig workers to be eligible for stimulus relief. On Tuesday, California Attorney General Xavier Becerra and three city attorneys in the state announced a lawsuit against Uber and Lyft, alleging they denied workers benefits by misclassifying them.

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