Uber Loses CTO; Considers 20% Staff Layoffs With Bookings Down 80%
Uber has lost one of its top engineers, after its chief technology officer, Thuan Pham resigned from the company, the company revealed earlier this week, as it looks to cut costs amidst the coronavirus pandemic’s social isolation instructions eviscerating its core business model.
Pham was hired by Uber as its chief technology officer back in 2013, and upon his departure, will be the longest-serving executive at Uber. He’s one of the last executives of the ‘Kalanick’ era, Uber’s former CEO who was ultimately taken down by scandals.
“While the work is never done, I feel comfortable hanging up my hat at a time when the Uber Engineering team is at peak productivity, we have built robust system scale and stability, and are well prepared to face the future,” he said in a press release that was issued to the Securities and Exchange Commission. “This has been a labour of love for me, and I am so proud of what we have done as a team.”
The Information first broke the news of Pham’s departure and reported that Uber’s executives have been tossing up cost-cutting measures that could see the company lay off as much as 20% of its existing employees.
If this plan goes ahead, 5,400 of its total 27,000 person employee force stand to lose their job at Uber, adding to the 1,000 staff it laid off last year in its engineering, product and marketing departments. The move could save Uber up to $1 billion in expenses, writes The Information.
A spokesperson for the company has refused to comment on reports of wide scale layoffs, but said that “as you would expect, the company is looking at every possible scenario to ensure we get to the other side of this crisis in a stronger position than ever.”
Uber’s CEO, Dara Khosrowshahi told investors in March that bookings in most major cities globally were down by 70%, while a report from The Information puts the number at around 80%. Business Insider writes that “private data suggested the decline could be even greater, to the tune of 94%.” Gains from the company’s food delivery service Uber Eats have not been enough to plug the hole in its sinking ride-hailing platform, which has dramatically increased the number of sign-ups to its service.
In that call, Khosrowshahi said that the company had modeled an “extreme edge case”, where the company would still end the year with $4 billion in cash and $2 billion in revolving credit.
Uber’s plan to achieve profitability in the fourth-quarter of this year looks all but shares have fallen more than 50% in the past few weeks with investor confidence plummeting and a pandemic-ravaged market that leaves few people in need of its ride-hailing or sharing platform.
The company has said previously that “given the evolving nature of COVID-19 and the uncertainty it has caused for every industry in every part of the world, it is impossible to predict with precision the pandemic’s cumulative impact on our future financial results.”