Uber Technologies to cut 3,000 jobs, mulls selling non-core units: WSJ

On Monday, Uber Technologies announced that it would be cutting an additional 3,000 jobs. The company also revealed that it was considering reducing investments in several of its non-core projects, to help focus resources in its ride-hailing and food delivery sectors. The Final Round panel discuss the latest from Uber.

Video Transcript

MYLES UDLAND: Let's turn our attention to a member of the 2019 IPO class. That is Uber, the company today-- or rather, "The Wall Street Journal" reporting that the company is laying off 3,000 additional employees. That brings their pandemic total to around 6,700 Uber employees that have been laid off. That's 25% of its workforce.

And Jen, I think today's story, the details-- and again, the company, you know, publishing this in an internal memo [INAUDIBLE], but the details here that Uber is basically slimming down, I guess, is the way that I'm thinking about it, but this whole Amazon of transportation-- they were going to be in all these different areas and dominate all these things-- I mean, if you're not doing core ridesharing or Uber Eats, the company kind of doesn't really want any part of it right now.

JEN ROGERS: Right, it is a real slimdown here. And I think, look, this is a rightsizing. We're seeing it in big numbers on Uber. We've also seen it at Airbnb. But this is happening among all companies that have been, you know, growing, really, these last few years.

And we are seeing cutbacks across the board. These Uber numbers are pretty big, though. And I think it really goes to they have to figure out how to make money. And is it going to be-- I mean, look, they thought ride hailing was the way to do it.

Now the pandemic, maybe not. Maybe we're going to double down on the Eats business. But they have to go core here, lean and mean, and try and figure out how to be not just the market leader, but the market leader that makes money. And that's what these cuts are about.

DAN ROBERTS: And guys, a note on these Uber cuts. I was talking to someone who still works at the company, luckily-- knock on wood, still will continue to work at the company-- who was saying that a lot of the cuts have been customer service reps. And those kind of people can obviously be based anywhere. So they're already remote workers.

But that was a role that was needed more when a lot of rides were happening. And during this time, the biggest hit has been to customers ordering rides. So if a far, far smaller number of people are actually getting in Ubers, then you need a far, far smaller number of customer service reps.

And the other thing to keep in mind here is if and when things get better, that is also the type of role that is easy to ramp back up again quickly. They can hire back a lot of those people if need be. So I get the feeling that that's kind of been one of the main functions to go, as well as probably marketing, those types of roles. Because a lot of these functions rely on the company thriving right now with a large number of users ordering rides. And that's not happening.

Now, of course, the other most interesting story, as Jen alluded to, let's continue to see what happens with that UberEats business. Because if rides don't come back quickly, even when a lot of states have reopened, if people aren't ordering Uber rides, maybe you do see a shift to Uber's focus being on the food ordering business because that's actually doing well.

MYLES UDLAND: I mean, I think you're seeing that now, right? I mean, the company can spin the type of roles getting rid of however it wants, but the reality is that Uber is going to get rid of the autonomous vehicle unit. I don't know if they're going to do it now, but that project, as far as I'm concerned, that project is dead.

And I think shareholders-- obviously, look at the stock today-- shareholders probably applaud that. Because the company had a pretty clear path to profitability. You know, the adjusted EBITDA inside the rides unit of the company has been positive over the last couple of quarters. So you can make money getting people in and out of your cars.

You can't make money on self-driving cars right now because they don't really exist. And I don't know where that project is at, and it doesn't seem like Uber is going to be the one to take on the capital investment to make that happen.

DAN ROBERTS: Yes, that was always that obsession of the moment, I felt like. You know, something that was in vogue, eveyone's doing it. OK, we'll do self-driving too.

MYLES UDLAND: Yeah, and I think also, like, you know, we've talked a little bit about, you know, what are the things that get left behind in the last bull market that everyone is really excited about when times were good? And, you know, the biggest worry was, like, the trade war, I guess. And I think, like, self-driving cars are probably one of those. Now everyone's going to say that, you know, I just don't get it. I'm an idiot. 2025 will be self-driving cars. And maybe. That's possible.

DAN ROBERTS: No.

MYLES UDLAND: But I think the retrenchment that we're seeing, you know, not only at Ford and GM, but you know, at Uber, I think Alphabet probably going to do something along these lines, you know, slimming down the other bets unit. It seems like that stuff is kind of changing and has gone away, given the current environment that, you know, not only we're in right now, but we're likely to be in for some time to come.