Lyft announced on Thursday that it will lay off 13% of its workforce, or nearly 700 people, as it rethinks its workforce in the face of rising inflation and fears of a recession.
Lyft (LYFT) co-founders Logan Green and John Zimmer said in a memo to employees on Thursday, a copy of which was shared with CNN Business, that the layoffs will affect every part of the company and cited broader macroeconomic challenges as the reason for the cuts.
“We know today will be hard,” the founders wrote in the memo. “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,” the memo said. “Still, Lyft has to become leaner, which requires us to part with incredible team members.”
Throughout the pandemic, the tech industry seemed to expand as consumers shifted more of their lives online.
However, a number of technology companies reported slower growth in the September quarter as customers and advertisers reconsidered their spending. Many in the technology sector are rethinking their investments and staffing requirements.
Amazon announced on Thursday that it would halt corporate hiring for several months due to the current economic climate.
Stripe, a payment processing company and one of the world’s most valuable startups, also announced 14% layoffs on Thursday.
“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” Stripe CEO Patrick Collison wrote in a note to employees.
To read our blog on “Lyft is bringing carpooling back to more places, including San Francisco,” click here
