Lyft’s new CEO, David Risher, told employees in an email Friday that the company is significantly reducing its workforce as part of a restructuring effort.
Risher said the restructuring is part of Lyft’s plan to “better serve the needs of riders and drivers.” The company confirmed that it has not changed its guidance for the first quarter despite the upcoming layoffs.
What’s less clear is how this could affect programs outside of the transportation service, such as its bike-sharing service.
Lyft does not employ drivers who use the rideshare app to pick up and drop off passengers. Instead, the layoffs will target the company’s more than 4,000 full-time employees. Employees will know if they have a job or not through an email that will be sent on April 27.
Lyft did not disclose the number of people who will be removed. A WSJ report, citing unnamed sources, said some 1,200 workers, 30% of its total workforce, would be affected.
Risher, a former Amazon retail executive, took over as chief executive officer at Lyft after co-founders Logan Green and John Zimmer stepped down last month.
Risher explained in the email that he made the decision to help the company achieve its two main purposes.
“Lyft has two interlinked purposes: We help riders get out and about so they can live their lives together, and we give drivers a way to work that gives them control over their time and money,” he wrote.
“We need to be a faster, flatter company where everyone is closer to our passengers and drivers to deliver on this purpose,” and we must reduce our costs to deliver affordable travel, attractive driver earnings and profitable growth. We intend to use these savings to invest in competitive pricing, faster pickup times, and better profits for drivers. All of this forces us to downsize and restructure the way we are organized.
The move may not surprise those who closely follow Lyft and its struggles to keep up with rival Uber.
Risher told TechCrunch in an interview in late March that Lyft could drop its rideshare offering and make other changes to its business model in an attempt to focus on its core rideshare business and become profitable.
He listed a number of other products and services that could go away, including Wait & Save, which allows passengers in certain regions to pay a lower fare if they wait for the best-placed driver.
“It’s possible that we may not need both anymore and can focus all of our resources on doing fewer things better,” Risher told TechCrunch at the time. “Maybe it’s time we said ridesharing was great for a while, but it’s time to let it slide.