- Ridesharing company Lyft, Inc (NASDAQ:LYFT) updated on its restructuring plans within a week after disclosing its layoff plans.
- On Thursday, Lyft disclosed a restructuring plan as part of its efforts to reduce operating costs.
- The plan involves terminating approximately 1,072 employees, representing 26% of its employees.
- It proposes to scale back hiring and has eliminated over 250 open positions.
- Lyft estimates that it will incur a cost of approximately $41 million – $47 million related to severance and employee benefits in the second quarter of 2023.
- In the same quarter, it also expects to incur an additional cost associated with stock-based compensation and the related payroll tax expense for employees.
- CEO David Risher also outlined plans to restructure the company.
- Risher’s measures include consolidating Lyft’s ride-share operations into three core teams and eliminating “layers of management across the company” so employees are close to leaders, the Wall Street Journal cites Risher’s internal note.
- Those changes, he added, will result in cost savings that will pass on to riders and drivers in the form of lower prices and higher earnings.
- Lyft struggled to gain market share versus Uber Technologies Inc (NYSE:UBER), which gained market share and drivers during the pandemic. Lyft also chose not to diversify beyond transportation and geography, unlike Uber.
- Price Action: LYFT shares traded lower by 0.78% at $10.12 premarket on the last check Friday.
- Photo via Wikimedia Commons
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