Uber has laid off 435 staff in its product and engineering team. This new development follows an earlier staff cut of almost a third of its global marketing staff. The company has let go of 170 people in its product team, and 265 in its Engineering team following slim revenues. However, the cuts will not affect staff in UberEats: Uber’s meal delivery business.
The total lay off amounts to 8% of the two teams after the company faced turbulent times on Wallstreet. According to the company, the layoffs are necessary to guarantee a competitive edge. At the same time, Uber’s CEO Dara Khosrowshahi believes that the cuts would increase the company’s efficiency in operations.
“There’s a general sense that while we’ve grown fast, we’ve slowed down” revealed the CEO.
Earlier, Uber grew its teams because the company needed to scale a global business as well as find a product-market fit. However, the company’s rapid staff growth seems to drag it down, calling for a shift in design. Mr. Khosrowshahi is now pushing for a lean structure characterized by exceptionally high-performing teams with clear mandates.
“Previously, to meet the demands of a hyper-growth startup, we hired rapidly and in a decentralized way. While this worked for Uber in the past, now we need to shift how we design our organizations..” reads a statement from Uber.
The statement further reveals that the staff changes will help achieve a staff base that matches the company’s top priorities. Moreover, the company is driving towards making its drivers independent contractors. The new classification will help the company save labor costs they would otherwise pay if the drivers were full-time employees.