Uber has laid off one third of the employees, or 400 people, in its marketing department, according to a report in The New York Times.
The move is an attempt by the company to streamline the way it works and to reduce costs. The company has been struggling financially and is not profitable, and those issues were exacerbated by a less than stellar initial public offering (IPO) in May.
The company announced the layoffs on Monday (July 29). The cuts are happening in Uber offices all around the world.
Before the layoffs, there were about 1,200 people in the marketing department, and Uber has 25,000 employees in total. Half of its workforce is based in the U.S.
The company has faced a lot of scrutiny from Wall Street since its IPO. It has a lot of operational costs, and it takes a lot of money to recruit drivers. On its first day of trading, stock fell 7.6 percent.
The company’s CEO, Dara Khosrowshahi, has been making a lot of changes in a bid toward profitability. He got rid of two executives in June, COO Barney Harford and Chief Marketing Officer Rebecca Messina. Communications head Jill Hazelbaker absorbed the marketing team.
Hazelbaker told marketing employees that the layoffs were happening because the team was too big and it was affecting the way decisions were made.
There’s also been turnover on the Uber board. Ryan Graves, who was the company’s first employee and CEO, left in May. In the middle of July, Arianna Huffington, who founded Thrive Global, and Matt Cohler, a venture capitalist, both left as well. Both people were a part of the ousting of former Uber leader Travis Kalanick.
Huffington said she was leaving to focus on growing her own company. Cohler said he was “thrilled with the company’s position” upon his departure.
Next week, the company will report its Q2 earnings. Q1 showed that Uber had its slowest growth period in years and that it lost $1 billion.