Lyft lays off 17% of workforce, furloughs hundreds more
Lyft President John Zimmer (R) and CEO Logan Green speak as Lyft lists on the Nasdaq at an IPO event in Los Angeles March 29, 2019.
Mike Blake | Reuters
Lyft is laying off 982 employees and furloughing an additional 288 in an effort to reduce operating expenses and adjust cash flows due to the Covid-19 pandemic, the company announced Wednesday in a regulatory filing.
Lyft stock was up more than 5% Wednesday afternoon, amid a broader market rally thanks to a study from drug maker Gilead that showed promising results for antiviral drug remdesivir in Covid-19 patients.
The layoffs account for 17% of the company’s workforce, Lyft said. Lyft also has implemented reductions in base salary for employees exempt from the layoffs and furloughs for a twelve week period. The salary cuts, which begin in May, will consist of a 30% reduction for executive leadership, 20% for vice presidents and 10% for all other exempt employees, Lyft said.
Lyft said it expects to incur approximately $28 million to $36 million of restructuring and related charges from the layoffs, primarily related to employee severance and benefits. The company said that will mostly impact its second quarter. Lyft’s board member’s will also forego 30% of their cash compensation for the second quarter of 2020.
Lyft’s filing comes just a day after The Information reported that Lyft’s rival Uber is discussing laying off 20% of its staff. Uber declined to comment on the layoffs, but did say in a regulatory filing Tuesday that its long-time CTO resigned from the company. Rideshare companies have seen a drop in demand as the Covid-19 pandemic keeps Americans largely at home.