Check out the Memo from Cofounder Announces 683 Job Losses

• Lyft intends to lay off 13% or 700 employees.
• Logan Green, John Zimmer and John Zimmer were cofounders. They announced the layoffs in an email to staff on Thursday.
• They wrote that they are facing a possible recession in the next year, and that rideshare insurance costs have risen.

Amidst a The fourth quarter outlook is gloomyYou can also find out more about a probable looming recessionMany tech companies have chosen to cut spending to weather the economic downturn and have decided to stay in check. 

Lyft, the rideshare startup Lyft, has announced massive layoffs to reduce costs.

Logan Green, one of Lyft’s cofounders, and John Zimmer, another wrote on Thursday that the company would lay off 13% (or around 700 employees) and also look to sell its first-party car service business. This is a small portion of the memo Publication.

The memo says that “We worked hard this summer to reduce costs: we slowed down, then frozen hiring; cut spending; paused less critical initiatives; and made improvements in our operations.” Lyft needs to be leaner. This means that we must part with amazing team members.

Lyft claimed that the layoff plan will result in the termination of 683 employees, 13% of the workforce. Lyft expects to incur restructuring costs of approximately $27 to $32 million for employee severance, benefits and other charges in the fourth quarter of 2022. This is according to a regulatory document. FileThursday

Lyft’s troubles are particularly distressing in comparison to archrival Uber Technologies, Inc. Revenues reported to be strongIts ride-hailing service and food delivery services were the most popular in the third quarter 2022.

Lyft will publish its third quarter results After the close on November 7,According to a company file. According to Lyft’s memo, the company confirmed that there were no changes in the previously published guidance regarding third quarter 2022 revenue, contribution margin and Adjusted EBITDA or our 2024 financial goals for $1 billion in Adjusted EBITDA plus more than $700,000,000 in Free Cash Flow.

The share prices of the company have increased Year to date, the drop was almost 70%.

Insider sent a request for comment from Lyft outside of business hours and was not immediately answered by the company. 

Below, you can find a brief excerpt from the memo sent out to staff members. 

Team,

We have just sent out an invitation to everyone inviting them to come to our all-hands meeting at 11:00 PT to hear some difficult news. Despite our efforts to avoid this, we have made the hard decision to let go of 13% of the team. We are also pursuing a divestiture (sale), of our first-party car service business. In that event, most of those team members should be offered roles by the acquiring company.

Today will be difficult, we know that. We want to give you an overview of how and why we made this decision. Also, how we are supporting the departing members. And what you can expect in the days ahead.

What’s going on?

The economy is facing many challenges. There is a possibility of a recession in the near future and rideshare insurance prices are rising. We did everything we could to reduce costs this summer. We slowed down, then frozen hiring, cut spending, and paused less-critical initiatives. However, Lyft needs to be leaner which means that we have to part ways with some of our most talented team members.

Layoffs affect every organization within the company and are based on deprioritized initiative, an effort to decrease management layers, larger savings goals and, in certain cases, performance trajectory.

We are confident about the overall direction of the business. These proactive steps were necessary to ensure that execution could be accelerated, we remained focused on the best opportunities for profitable growth, and that our business results can be strong in 2023 and beyond. 

Support for members who leave the team

We are aware of the impact this decision can have on team members who are leaving. Lyft offers support for team members who are leaving.

• 10 weeks of payment 

• Access to Modern Health and healthcare coverage up until April 30, 2023

• Accelerated equity vesting in November 20 for the vesting date 

• Assistance with recruiting, including coaching sessions for resumes and interviews.

• Lyft employees with 4+ years of experience will receive an extra four-week pay.

Moving forward

We are focusing on taking care of team members who are leaving, many of whom are also our friends. We are grateful to all those team members who have given their time for Lyft’s mission, community, and business. 

We cannot ignore the effects of inflation or a slowing economy. We need 2023 to be a period where we can better execute without having to change plans in response to external events — and the tough reality is that today’s actions set us up to do that. We have to take responsibility for these decisions, and in the end protect the future that we are creating for the riders and drivers we serve.

Logan & John