Lyft plans to lay off 13% of its workforce, the company announced Thursday.
In a company email, co-founders CEO Logan Green and President John Zimmer said a looming recession and increasing rideshare insurance costs made the layoffs necessary. Lyft did not change its financial guidance for the third quarter of 2022 or its 2024 financial targets.
“We are not immune to the realities of inflation and a slowing economy,” the letter says. “We need 2023 to be a period where we can better execute without having to change plans in response to external events — and the tough reality is that today’s actions set us up to do that.”
In addition to its ride-hailing service, Lyft is the largest bikeshare company in the U.S. But it struggled to deal with rising costs this year. As of Friday morning, the company’s shares had fallen about 68% since the start of 2022. It’s been a tough year for micromobility services, with economic headwinds forcing other companies to reduce their staff and shutter operations, including Bird, Spin, Superpedestrian and Voi.
“We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives,” the letter says. “Still, Lyft has to become leaner.”
Lyft will terminate nearly 700 employees, saving the company about $27 million to $32 million, according to a filing with the U.S. Securities and Exchange Commission. The company will provide laid-off employees with at least 10 weeks of pay, health insurance through April 2023 and other assistance, the letter says.
Lyft will report its third-quarter results on Monday.