Lyft, the popular ride-hailing service, is undergoing significant restructuring, which includes significant workforce reduction, according to an email sent by the company’s new CEO David Risher.
Risher, who took over the position after co-founders Logan Green and John Zimmer stepped down last month, said the restructuring is part of Lyft’s plan to better meet the needs of riders and drivers.
Although the company has not changed its guidance for the first quarter, the layoffs will be directed at the company’s more than 4,000 full-time employees, and an email will be sent out on April 27 informing employees whether they will have a job or not. Lyft has not disclosed the number of people who will be cut, but a report from The Wall Street Journal, citing unnamed sources, said that about 1,200 workers, 30% of the total workforce, would be affected.
Risher stated in his email that the restructuring is necessary for the company to achieve its two core purposes. These purposes, according to Risher, are helping riders get around so they can live their lives together and providing drivers a way to work that gives them control over their time and money.
He further explained that Lyft needs to become a faster, flatter company where everyone is closer to its riders and drivers to deliver on these purposes.
The move may not come as a surprise to those who closely follow Lyft and its struggles to keep pace with rival Uber. In a March interview with TechCrunch, Risher said that Lyft might drop its shared rides offering and make other changes to its business model to focus on its core ride-hailing business and become profitable.
He listed a number of other products and services that could disappear, including Wait & Save, which allows riders in certain regions to pay a lower fare if they wait for the best-located driver.
The restructuring is part of Lyft’s plan to reduce costs to deliver affordable rides, compelling earnings for drivers, and profitable growth. The company intends to use the savings to invest in competitive pricing, faster pick-up times, and better driver earnings.
However, what’s less clear is how this might affect programs outside of ride-hailing, such as its bike-sharing service. With the layoffs set to be announced next week, the full impact of the restructuring on the company and its workforce remains to be seen.