Lyft, an app transportation company, announced that it would lay off 13% of its workforce, that is, around 683 employees, in order to reduce operating and administrative costs to face the bad economic times that the country is experiencing.
This decision is related to the negative impact that inflation is having on consumers, who are choosing not to use this transportation option as often. In addition, inflation increases operating costs for the company, they reported.
According to Reuters, Lyft’s latest move is expected to result in a charge of between $27 million dollars and $32 million dollars in the fourth quarter of the year. The layoff decision is not new, as Lyft made a cut earlier in the year.
Despite its adjustments at the beginning of the year, Lyft laid off 60 people in July, on the other hand, the company has not grown his staff, since since May 2020 he reported that he would stop counting. In addition, at that time it cut salaries for all categories, the senior managers were affected by the adjustment.
Next Monday, Lyft will announce the results of the third quarter, in this sense the brand reported that the layoffs would not affect its previously issued forecast for the period. Revenue is expected to be between $1.04 billion dollars and $1.06 billion dollars.
Shares of the San Francisco, California-based company fell 1%. “The announced reduction in force is a proactive step as part of the company’s annual planning,” Lyft said in a statement.
In addition to the adverse economic scenario, companies such as Lyft and Uber, which base part of their workforce on the support of independent workers, are concerned about a proposal from the Department of Labor that seeks to limit the use of independent contractors , a fact that could increase operating costs.
According to Reuters, experts on the subject believe that legal challenges and business groups pressing for changes could derail the efforts of the Biden administration. In this way, Lyft, founded by Logan Green and its current president, John Zimmer, will have no problem meeting the projection.
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