With the ongoing coronavirus pandemic still keeping people at home, Uber could be in dire straits, facing potentially laying off 20 percent of its workforce, according to Axios.
The layoffs are not certain yet, but if they go through, it could mean a reduction of over 5,400 of the company’s 27,000 positions.
Uber has withdrawn its financial forecasts for the remainder of 2020, suggesting the company now foresees a longer impact than it did previously. The company’s chief technology officer, Thuan Pham, recently resigned his position, according to sources with knowledge of the situation.
Asked to comment on the updates, an Uber spokesperson said, “As you would expect, the company is looking at every possible scenario to ensure we get to the other side of this crisis in a stronger position than ever.”
Thus far, the popular ridesharing company has buoyed itself by way of its food delivery service, helping people get groceries in an environment where too much contact with others means risking coronavirus infection. Restaurants seeking to remain in business through delivery options have also implemented this feature.
But that may not be enough for Uber, as its main bread and butter, ride-hailing, has dropped by drastic amounts, with a majority people avoiding traveling very far at all. In Seattle, that aspect of Uber’s business saw a 60 to 70 percent decline at the height of the city’s COVID-19 outbreak.
The coronavirus crisis has proved harsh for gig economy workers with Uber and other companies. In addition to many of them being pushed to the frontlines for food deliveries, unemployment benefits have proved tricky — a problem which more layoffs could exacerbate.
Gig workers’ status as contract workers make it unclear exactly what documents they need to submit to qualify for unemployment benefits. The position of Uber and similar companies in the past has been that many such workers enjoy the flexible schedules and lack of traditional routine.