Lyft Lays Off 1,072 Employees – 26% of Workforce – 6 Months After 13% Head Count Cut

Ride-hailing app Lyft has confirmed plans to lay off 1,072 employees, or 26% of its corporate workforce, while leaving an additional 250 positions vacant.

The announcement came just a week after new CEO David Risher’s memo hinted at a headcount reduction, and follows a 13% cut to head count implemented in November 2022.

Lyft’s stock, which has never risen above its debut price, has suffered a challenging year, remaining down by around 8% year to date.

With the broader economic slowdown taking a toll on tech companies, over 184,000 tech employees have lost their jobs in 2023 alone, according to Layoffs.fyi data.

Risher, who assumed the role of CEO earlier in April, has highlighted the need for streamlined operations and a return to “better meeting the needs of riders and drivers.”

Our new CEO, David Risher (@davidrisherWR), jumped into the driver's seat for the first time last night pic.twitter.com/Txojr9BStm

— Lyft (@lyft) April 2, 2023

Despite the changes in leadership, Lyft co-founders Logan Green and John Zimmer will continue to serve on the company’s board.

Lyft Stock Suffers Tumultuous 2023

The recent layoff announcement appears to have resonated with investors, as an initial -3% drop in Lyft shares following the news has quickly returned to consolidation around $10.20.

But Lyft is still reeling from a disappointing earnings report in February which saw Lyft share price collapse -36% in 24 hours.

Source.

The company is expected to post a quarterly loss of $0.09 per share in its upcoming report, a year-over-year change of -228.6%.

However, revenues are projected to be $976.57 million, an 11.5% increase from the same quarter last year – Lyft shareholders await with baited breath.

CEO David Risher Aims To Boost Earnings Through Efficiency

Risher has emphasized that the company’s main objectives are to reduce costs, deliver affordable rides, ensure compelling earnings for drivers, and achieve profitable growth.

The savings generated by the layoffs are intended to be invested in competitive pricing, faster pick-up times, and better driver earnings.

While earnings and revenue growth expectations play a crucial role in evaluating a stock’s potential strength, empirical research indicates a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Lyft, the consensus earnings per share (EPS) estimate for the quarter has remained unchanged over the past 30 days.

Given this, it’s essential for investors to monitor Lyft’s progress to determine whether the recent surge in share price can be sustained and translated into further strength down the line.

With Risher at the helm and a renewed focus on efficiency, the company aims to navigate the challenging economic climate and emerge stronger than ever.

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