Uber Technologies (NYSE: UBER) announced that it has plans to lay off close to one-third of its 1,200-person marketing department. This comes only a few months after the company had its IPO on May 10. The company and its underwriters decided on a $45 offer price. As of open on July 30, Uber shares were at $43.71 — below its offer price. It’s only been two months, and the company hasn’t been experiencing the success it was hoping for.
This layoff comes at a time when the company is trying to cut its costs and make operations more efficient following its public debut and first quarter losses of $1 billion. About 400 people lost their jobs in Uber’s marketing department across its 75 offices globally. In March 31, 2019, Uber accounted for 24,494 global employees.
CEO Dara Khosrowshahi and marketing and public affairs lead Jill Hazelbaker wrote an internal email detailing that there will be a more centralized structure for its marketing team going forward. This new centralized structure will be led by Mike Strickman. Strickman joined Uber a month ago from TripAdvisor, and he will be overseeing marketing, customer relationship management (CRM), and analytics.
—————————————–Sponsored Link——————————————-
Analyst: “All hell is about to break loose”
What you do in the next few days could determine your financial destiny for the rest of your life. The same forces that have triggered every financial boom and bust in our lifetimes are forming a powerful supercycle that will rip through the world economy. Don’t disregard this warning. Take a moment now to get the details on the terrifying new stock market ahead and learn why we’re in for a 60-month long rollercoaster ride through hell.
—————————————————————————————————–
Over the past few months since going public, the company has realized it will need to take necessary steps to reduce its costs. Uber’s CEO wants to get the company back on track, and one way to do that would be to restructure its marketing team.
Khosrowshahi said in an email to employees:
[Uber’s teams are] too big, which creates overlapping work, makes for unclear decision owners, and can lead to mediocre results. As a company, we can do more to keep the bar high, and expect more of ourselves and each other.
He continued on in the email, saying:
Today, there’s a general sense that while we’ve grown fast, we’ve slowed down. You can see it in Pulse Survey feedback and All Hands questions, and you can feel it in much of our day-to-day work. This happens naturally as companies get bigger, but it is something we need to address, and quickly.
Since going public, it’s obvious that Uber has had some growing pains before, and now with shareholders and the public watching the company’s every move even more intensely, it means it can’t sit back and hope for the best.
Recently, Uber reported its first quarterly earnings report as a publicly traded company. The earnings report basically showed Uber’s business was growing, but it was also experiencing shocking operational losses.
Uber’s revenue grew 20% to $3.1 billion, compared to the $2.5 billion reported in the same period last year. Its gross bookings rose 34% to $14.6 billion, but most of that growth came from the company’s Uber Eats segment. However, Uber can’t rely on Uber Eats to continue to give the business revenue growth since the food delivery market is very competitive and there are no guarantees of who will come out on top.
Khosrowshahi told his employees that he wants to be even more involved with what’s going on in the day-to-day operations of the company’s biggest businesses, like Rides and Eats. He even said that they should report to him directly about both of those businesses.
It’s time to get serious, cut costs, and prove to the market that it is worthy of the investment. Uber needs to continue its growth, but it desperately needs to reduce and not let its operations cost increase any further.
Until next time,
Jennifer Clark
Pro Trader Today