Ride-hailing company Uber Technologies (UBER) has cut 600 jobs in India, roughly a quarter of its total Indian workforce, the company revealed today.
“The impact of Covid-19 and the unpredictable nature of the recovery has left Uber IndiaSA with no choice but to reduce the size of its workforce” Uber India and South Asia President Pradeep Parameswaran said.
“Around 600 full time positions across driver and rider support, as well as other functions, are being impacted. These reductions are part of previously announced global job cuts this month,” he added.
Uber will offer the 600 employees a minimum 10 weeks payout as well as six months medical insurance coverage and outplacement support.
On May 18 UBER stock rose 6% after the company revealed plans to cut another 3,000 jobs following the first round of 3,700 layoffs announced earlier this month. Uber expects to incur $175 million to $220 million in severance and benefits charges due to the job cuts.
“We are concentrating our efforts on our core mobility and delivery platforms and resizing our company to match the realities of our business,” Uber CEO Dara Khosrowshahi said in a SEC filing. “We are making these hard choices now so that we can move forward and begin to build again with confidence.”
Indeed, Covid-19 has had a dramatic impact on rides, with the business down globally around 80% in April. Meanwhile Uber’s Indian rival Ola recently revealed that revenue has plunged 95% over the past two months, leading it to lay off 1,400 employees- about 35% of its workforce.
Overall, Wall Street analysts have a bullish outlook on Uber’s stock boasting 26 Buys, 3 Holds and 1 Sell that add up to a Strong Buy consensus. The $39.50 average price target implies shares have room to advance 13% in the coming 12 months. (See Uber’s stock analysis on TipRanks). Shares have so far gained 17% year-to-date.
“We think these changes underscore a more focused and mature Uber and will likely result in an accelerated path to break-even if end markets recover,” BofA Securities analyst Justin Post told investors following the announcement.
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