Lyft announced a round of staff cuts amid questions about the company’s ability to stem its enormous losses and show how it can achieve profitability. The company is laying off about 90 employees, or around 1.6 percent of its 5,500-person workforce. The layoffs were first reported by The New York Times — though Lyft denied that it was part of a broader corporate restructuring, as originally reported by the Times.
The layoffs will affect Lyft’s marketing and enterprise sales departments, according to a spokesperson. The company is moving away from city-based marketing teams to more regionally focused ones, while the enterprise team is reprioritizing its most important markets.
“We’ve carefully evaluated the resources we need to achieve our 2020 business goals, and the restructuring of some of our teams reflects that,” a spokesperson said. “We are still growing rapidly and plan to hire more than 1,000 new employees this year.”
Lyft’s recent earnings reports have spurred investor doubts
Lyft CEO and co-founder Logan Green recently said publicly that he expects the company to become profitable on an adjusted earnings basis at the end of 2021, a year ahead of its original projection. But Lyft’s recent earnings reports have spurred investor doubts about the company’s near-term future.
Lyft said it lost $463.5 million in the third quarter of 2019, which was almost twice the amount that the company lost over the same period of time last year. The ride-hailing company brought in nearly a billion dollars in revenue — $955.6 million to be exact — which, compared to $585 million of revenue in the third quarter of 2018, represents an increase of 63 percent year over year. The previous quarter, Lyft reported losing $644 million, or $197 million after adjusting for so-called EBITDA (earnings before interest, tax, depreciation, and amortization).
Uber and Lyft, which both went public this year, have set records for the amount of money lost in the run-up to their respective IPOs. And since going public, both companies have continued to disappoint institutional and retail investors. Uber had to lay off around 1,000 workers last year amid its own restructuring efforts.