Lyft slashing another 700 jobs amid rising insurance costs, ‘probable recession’

SAN FRANCISCO — Mobility services company Lyft Inc. on Thursday confirmed plans to cut an additional 13% of its workforce, or roughly 700 employees.

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In an email to employees obtained by CNBC, Lyft CEO Logan Green and President John Zimmer referenced what they called “a probable recession sometime in the next year” and rising rideshare insurance costs.

The cuts will affect all teams, the email confirmed.

“We are not immune to the realities of inflation and a slowing economy,” Green and Zimmer wrote, adding, “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.”

According to The Wall Street Journal, Lyft currently employs more than 4,000 people, not including its drivers. The news comes about four months after the San Francisco-based ride-hailing company laid off 60 people, or roughly 2% of its workforce at the time.

As per the email, laid-off workers are being offered 10 weeks of pay, health care coverage through the end of April, accelerated equity vesting for the Nov. 20 vesting date and recruiting assistance. Meanwhile, employees who had been with Lyft for more than four years will receive an additional four weeks of pay, CNBC reported.

The executives also confirmed that Lyft will sell its vehicle service centers and that most of that team is expected to receive roles from the unnamed acquiring company, the Journal reported.

Read the full text of the email to Lyft employees below:

“Team,

We just sent an invitation for everyone to join us for an all-hands at 11:00 am PT to share some tough news. 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.

We know today will be hard. To help provide initial context, we want to share how we made this decision, how we’re supporting departing team members, and what to expect over the coming days.

What’s happening

There are several challenges playing out across the economy. We’re facing a probable recession sometime in the next year and rideshare insurance costs are going up. 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.

The layoffs impact every organization in the company, and were based on deprioritized initiatives, an effort to reduce management layers, broader savings goals, and, in some cases, performance trajectory.

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.

Support for departing team members

We understand the real impact this decision has on departing team members. Lyft will offer support to departing team members:

• 10 weeks of pay.
• Healthcare coverage through April 30, 2023, including access to Modern Health.
• Accelerated equity vesting for the November 20 vesting date.
• Recruiting assistance, including coaching sessions on resumes and interviews.
• Team members with 4+ years with Lyft will receive an additional four weeks of pay.

Moving forward

Our priority today is taking care of departing team members, who for many of us are also friends. To those team members, although we know no words are sufficient, thank you for everything you have done for the Lyft community, mission, and business.

We are not immune to the realities of inflation and a slowing economy. 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. It’s our responsibility to take ownership of these decisions and, in the end, protect the future we’re building for the drivers and riders we serve.

Logan & John”

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