Lyft Lays Off Nearly 700 Staff and Braces for Changing Economy

Ride-hailing company Lyft is making another cut to its employees by laying off nearly 700 members of its staff, effective Thursday (Nov. 3).

In a note sent to Lyft team members, the company’s executives said that the job cuts are a response to a changing economy.

“Despite efforts to avoid this day, we’ve made the difficult decision to lay off 13% of the team. Additionally, we are pursuing a divestiture (sale) of our first-party vehicle service business, and in that case we do expect most of those team members will be offered roles from the acquiring company,” Lyft Co-founders Logan Zimmer and John Green said.

This comes after Lyft had previously reduced its workforce in July, letting 60 employees go at that time.

“We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives. Still, Lyft has to become leaner, which requires us to part with incredible team members,” Zimmer and Green said in a shared blog post.

Lyft’s announcement Thursday speaks to a greater issue facing the gig economy as the U.S. looks to regulate gig workers.

The U.S. Labor Department proposed Oct. 11 through new rules that gig economy workers can be classified as employees rather than as contractors.

In a statement received by PYMNTS, a Lyft representative said, “We are confident in the overall trajectory of the business. It was important to take these proactive actions to ensure we can accelerate execution, stay focused on the best opportunities to drive profitable growth, and deliver strong business results in 2023 and beyond.”

Read more: Uber Piloting Back-of-Seat Ads on Tablets in Latest Revenue Push

Meanwhile, Lyft’s competitor Uber announced last month (Oct. 24) that it is piloting a new advertising model in California and will display ads on tablets attached to the back of seats as part of the rideshare and delivery company’s latest push to drive revenue.