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Uber announced even more layoffs on Tuesday, following an earlier round in July. The ride-hailing company confirmed it's letting go of hundreds of employees in its engineering and product departments to "reset and improve how we work day to day." The total number of staff it laid off this time was 435 people, or about 8% of each department.
"We need to shift how we design our organizations: lean, exceptionally high-performing teams, with clear mandates and the ability to execute faster than our competitors," an Uber spokesman said in a statement. "Today, we're making some changes to get us back on track, which include reducing the size of some teams to ensure we are staffed appropriately against our top priorities."
The layoffs, first reported by TechCrunch, come during a rough period for Uber as it attempts to gain footing as a public company. After debuting on Wall Street in May, the company has seen plummeting stock prices, quarterly revenue loss and an exodus of high-level executives. Three of Uber's board members have stepped down since then, along with its chief operating officer and chief marketing officer.
Uber and its rival Lyft are also fighting a proposed law in California that could reclassify drivers as employees, rather than keep them as independent contractors. The worker protection law, called AB 5, is likely to be decided by legislators as soon as this month. If passed, Uber's and Lyft's costs would likely rise as the companies would have to manage a workforce of tens of thousands in the state.
In all, Uber says it has more than 27,000 employees worldwide. Besides the 435 employees it let go this week, the company also laid off 400 employees from its marketing department in July. At that time, Uber CEO Dara Khosrowshahi said the marketing team was oversized, which led to "overlapping work" and "mediocre results."
With this latest round of layoffs, the Uber spokesman said Khosrowshahi asked his management team if they were satisfied with the design of their organizations.
"After careful consideration, our engineering and product leaders concluded the answer to this question in many respects was no," the spokesman said. "Previously, to meet the demands of a hyper-growth startup, we hired rapidly and in a decentralized way."
That worked in the past, the spokesman said, but it doesn't anymore.
"While certainly painful in the moment, especially for those directly affected, we believe that this will result in a much stronger technical organization," he said.