Lyft announced upcoming job cuts on Wednesday (Jan. 29) as part of what it termed a "corporate restructuring." The change comes as the ridesharing service — which employs 5,500 people — is asking itself hard questions about how it will continue to stay profitable, The New York Times reported.
The layoffs will hit about 90 people, and will consist of jobs in the marketing and enterprise sales departments. In the marketing arena, Lyft will be focusing on regional teams now, rather than state-by-state teams as it had previously. Its enterprise team is changing its priorities as well on what will be the new focus going forward.
Lyft spokeswoman Alexandra LaManna said the company had "carefully evaluated" which resources it would need to complete its goals this year going forward. She said it was "still growing," and would hire 1,000 new employees this year.
While once a darling among tech startups, Lyft has joined a sad club of said companies that have seen diminishing returns lately. Yet, the company has not cut jobs since going public last year.
Lyft's stocks fell after it went public in March, and did not end up recovering, with the shares down more than 30 percent from the offering price. However, CEO Logan Green told investors in October that the company was making progress on becoming profitable. He said Lyft could reach that goal by 2021 if it excluded some costs — a year ahead of schedule.
The company recently introduced a new car rental program in Los Angeles and San Francisco that will work similarly to a traditional rental company.
Lyft isn't the only company to see setbacks. Its chief rival Uber laid off 1,000 employees in numerous rounds of cuts.
WeWork is another tech startup that has been floundering, having cut 2,400 jobs recently amid a walk-back on its plans to go public. The company was also in need of a bailout from SoftBank recently.