Tuesday October 04, 2022

Uber CEO promises to be ‘hardcore’ about costs, slowing down hiring in memo to workers

According to an email memo sent to employees, Uber CEO Dara Khosrowshahi promised to cut costs in the face of a financial market “seismic shift”. This was first reported by CNBC. This effort to reduce spending comes in response to the dramatic shift in the labor market, which has Uber scrambling for drivers to meet growing demand. Khosrowshahi stated that the company will continue to treat corporate hiring as a “privilege” and that Uber may look to reduce or freeze its workforce as it strives to become a more efficient operation.
Uber is the latest company that has committed to a hiring slowdown in a tight labor market. Tech stocks have fallen sharply since the heights of the COVID-19 pandemic. Meta, the parent company behind Facebook, also stated that it would slow down hiring for mid-level jobs.
Uber will now be focusing on profitability on a free-cash flow basis, rather than adjusted earnings prior to interest, taxes, depreciation and amortization. Khosrowshahi stated that this is what investors expect.
Uber’s method of calculating its adjusted profits has been widely criticised for years. The company’s definitions of EBITDA include a large number of exclusions, which is widely considered to be an inaccurate measure of its overall profitability. The stock price of the company is down by more than 40% year-to-date.
Khosrowshahi wrote, “Meeting in the moment means making tradeoffs.” “The hurdle rate for investments has gotten higher. This means that certain initiatives that require substantial capital will be slowed down. Before we go big, we need to ensure that our unit economics are sound.
He says, “The least efficient marketing or incentive spending will be cut back.” We will view hiring as a privilege, and be careful about where and when we add staff. We will be more strict about cost control across the board.”
Uber spokesperson confirmed that the memo was authentic, but declined to comment on its contents.
Uber reported a $5.9billion loss in its first quarter earnings last week. This was due in large part to equity investments made in other mobility companies like Grab, Aurora and Didi. Uber claims it expects to report “meaningful positive cash flow” for the full year 2022, which would mark a first.

Leave a Reply

Your email address will not be published.

Back to Top
%d bloggers like this: