Uber Technologies is cutting about 3,300 roles, or 10% of its staff globally, in a restructuring aimed at removing management layers, consolidating teams, and reducing costs, according to multiple reports.

CEO Dara Khosrowshahi announced the changes in a companywide email on Wednesday, saying that Uber's growth in recent years has created "more layers, more coordination, more fragmented ownership, and in some cases structures that made sense when businesses were smaller but no longer serve us well at our current scale," as reported by The Economic Times and The Hindu Business Line.

The cuts are the company's largest since May 2020, when Uber cut about 6,700 jobs as pandemic restrictions crushed demand for ride-hailing services, according to Euronext Markets and The Times of India.

Scope of the Cuts

Uber had about 34,000 employees globally at the end of last year, according to its annual report. After this round, headcount drops to just under 30,000, which is about where the company stood in 2021.

The layoffs will reduce the number of managers by 20%, with some being moved to individual contributor roles, an Uber spokesperson said. The company did not disclose what percentage of managers would be laid off. The cuts also apply to non-managers.

As part of the restructuring, Uber is reducing nearly half the number of "micro-teams" — teams with only one or two members — and paring back employees who sit more than seven layers down from the CEO by 20%, according to Khosrowshahi's email, as reported by multiple outlets.

The company is also combining its three operations teams for restaurants, retail, and white-label delivery into single-threaded teams, and streamlining its core engineering, science, and delivery groups.

Remote Work Changes

Uber is mandating that only about 1% of employees can be fully remote going forward. The company will concentrate global teams in New York and San Francisco, require most remote workers to relocate, and maintain its three-day office policy, according to Euronext Markets and The Times of India.

Rationale and Future Investments

Khosrowshahi said the changes will "generate savings that we intend to reinvest in growth, innovation, and the capabilities that will matter most over the coming years," as reported by The Hindu Business Line and The Economic Times. He said more investments will be made into drivers, couriers, and merchants around the world, in addition to upgrades for its core business and work on an "autonomous future."

The move comes as Uber has vowed to commit more than $10 billion to robotaxi partnerships in the coming years. The company has reduced stakes in some companies and invested in Avride, Lucid Group, Nuro, and Rivian Automotive, according to The Hindu Business Line.

The layoffs follow earlier cuts in customer service and human resources departments this year. Uber had avoided massive reductions since the Covid-19 pandemic, and in May said it would moderate the pace of hiring.

Khosrowshahi did not mention the impact of AI in his announcement, unlike some tech executives, according to multiple reports. The changes are also driven by a desire to use more technology to drive daily operations, as reported by The Economic Times.

Market Reaction

Uber shares have fallen nearly 8% this year, amid investor concerns that autonomous ride-hailing companies such as Waymo could threaten Uber's dominant North American market share, according to Euronext Markets. Following the announcement, which was first reported by Bloomberg News, shares rose about 2% in premarket trading, according to The Times of India.

The job cuts are taking place across the US and other countries where the company operates.