The move had been rumoured for some time, and on Tuesday, Uber officially confirmed it. The company has announced a global, company-wide workforce reduction, cutting around 10 per cent of its employees, or roughly 3,300 jobs.
As has become common with major tech layoffs this year, Uber CEO Dara Khosrowshahi explained the decision in a memo to employees. He pointed to the company’s changing needs and the evolving technology landscape, with Uber looking to become increasingly reliant on artificial intelligence. The layoffs are intended to free up resources that can be redirected towards AI, including investments in autonomous vehicles.
In the memo, Khosrowshahi outlined the reasons behind the restructuring and explained how Uber plans to simplify its organisation, reduce management layers, consolidate teams and adjust its global location strategy.
Uber CEO Dara Khosrowshahi’s memo to employees
Team,
Today, we’re implementing several major organisational changes across Uber. We are removing layers of management, simplifying team structures, updating our global location strategy and directing our people and investments towards the biggest opportunities ahead. As part of these changes, we will reduce our workforce by approximately 10 per cent. Employees whose roles have been affected have already been informed, except in countries where local procedures must first be completed.
This was not a decision we took lightly, as it will have a meaningful impact on colleagues and friends who have contributed greatly to Uber. These changes are about our organisational structure and priorities, rather than the value of anyone’s contributions, which we continue to appreciate.
I know many of you are asking why we are doing this now, particularly when the business is performing strongly. Over the past five-plus years, Uber has expanded dramatically, with revenue nearly tripling. We have introduced new products, entered new businesses, reached more consumers and supported more earners, becoming a significantly larger and stronger company.
However, that growth has also increased complexity. We now have more layers, greater coordination requirements, fragmented ownership and, in some cases, structures that were appropriate when our businesses were smaller but no longer work as effectively at our current scale.
The opportunity ahead is enormous. We can bring Uber to hundreds of millions more people, invest further in drivers, couriers and merchants, continue innovating across our core businesses and build towards an autonomous future.
To achieve those goals, we have to make careful decisions about how we allocate our people, time and capital.
The changes announced today are intended to accomplish two things: make Uber simpler and faster while creating greater capacity to invest in the future. A leaner organisation should result in clearer ownership, quicker decisions and more time spent building rather than coordinating. The savings generated will also be reinvested in growth, innovation and capabilities that will become increasingly important in the years ahead.
As leaders, it is our responsibility to make difficult decisions and explain clearly how and why we arrived at them. Here is what we are changing and the reasoning behind it:
Organisational health: Through Pulse surveys and conversations with employees, we have heard that too much work depends on coordination between teams, discussions often take too long and decision-making responsibilities are not always clear. Many of you have likely felt that too much time is spent “aligning” instead of building products, delivering them or serving customers.
To address this, we have reduced positions primarily dedicated to coordination and clarified the responsibilities of the coordination roles that remain. We have also reduced management layers by expanding managers’ areas of responsibility, particularly in cases where managers had only one or two direct reports.
Overall, the number of employees positioned seven or more layers below the CEO has been reduced by 20 per cent, while the number of micro-teams has fallen by nearly 50 per cent. The result should be a simpler organisational structure that places greater emphasis on building rather than managing.
Team simplification: We have combined teams where fragmentation was leading to duplication and slowing down decision-making. One of the biggest examples is Mac’s decision to merge our three existing Delivery Ops teams covering Restaurants, Retail and Direct into single-threaded teams at the global, regional and country levels.
Operating these three businesses separately made sense during their early stages, but that approach is no longer as effective at Uber’s current scale. Combining their P&Ls under single owners will reduce duplication, make accountability clearer and allow general managers to deploy capital more efficiently according to their strategic priorities.
Another example is within Tech, where we are merging the Core Services Engineering and Science teams, bringing them into a structure similar to the one already used across Mobility and Delivery.
Location strategy: The advantages of working together, collaborating in person and solving problems as teams have become even clearer in the post-Covid environment. We are therefore introducing clearer principles around where teams and roles should be located, with the aim of concentrating employees in a smaller number of key hubs.
Global teams will be based primarily in our largest global hubs, New York and San Francisco. Regional teams will be located in designated regional hubs, local teams in country hubs and technology teams in tech hubs.
Wherever possible, we will prioritise having managers and their teams work from the same location, particularly for employees earlier in their careers. The vast majority of remote employees will also be asked to move to an office, meaning only around 1 per cent of Uber employees will remain remote.
We will continue enforcing our hybrid-work policy, which requires employees to work from the office three days a week. More information about the location strategy will be shared separately.
I recognise that this represents a significant amount of change, but we believed it was better to make one major shift rather than go through a series of smaller changes. We also understand that organisational restructuring can be highly distracting, and our responsibility is to create an environment where employees can concentrate and do their best work.
With these decisions now made, our attention turns to the future.
Uber has considerable momentum, strong financial capacity and opportunities ahead that are greater than at any point since I joined the company. The decisions we are making today are difficult, but they are intended to help us build an even stronger Uber for the years to come.
More information about the company-wide changes will be shared, and I encourage everyone to read the follow-up communication from your leaders explaining what these decisions mean for your individual teams, so that we can continue building together.
