Online taxi service Lyft has announced to lay off 13% of its total workforce. Moreover, the ride hailing service termed high inflation and weakening economy as reasons for cutting jobs.
Restructuring strategy will preserve profit
Decades high inflation, high fuel prices and economic challenges is affecting several businesses across the United States. Therefore, companies operating in various sectors are downsizing their workers in a bid to save costs and preserve revenues. Similarly, Lyft is the latest to join the list of the companies who has implemented job cuts. Moreover, the ride hailing company has decided to lay off 683 employees. This is a second round of the job cuts at Lyft. However, the current wave of layoffs is more significant one. Previously, the company laid off 60 workers earlier this year. In addition, Lyft also imposed a hiring freeze during September this year. Lyft stated that their restructuring decision is proactive one as it will help the firm in achieving the results in fourth quarter of the current fiscal year.
Layoffs and its impact on third quarter results
Lyft is likely to report its results for the third quarter on coming Monday. The company is expecting to achieve a revenue of $1.04 billion to $1.06 billion. Subsequently, they are hoping to achieve an adjusting core profit of $55 million to $65 million. Moreover, Lyft said that the 683 employees will cost between $27 million to $32 million in severance and benefits. However, the company specifically stated that the layoffs cost will not affect its previously issued forecast for the third quarter.
“The announced reduction in force is a proactive step as part of the company’s annual planning to ensure the company is set up to accelerate execution and deliver strong business results in Q4 of 2022 and in 2023.” Lyft said in a statement.
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