Uber announced an additional round of layoffs Tuesday, this time from its product and engineering teams. A total of 435 people were let go, or around 8 percent of the ride-hailing company’s entire workforce. The news, which was first reported by TechCrunch, comes a few months after Uber said it would be cutting 400 employees from its marketing division.
This latest round of layoffs comes after a brutal second quarter for Uber, with the company missing its revenue projections and reporting a record $5.2 billion net loss. In August, Uber confirmed that it had put in place a hiring freeze on new software engineers and product managers, but now — even as it cuts hundreds of workers — the company says that freeze has been lifted.
“Our hope with these changes is to reset and improve how we work day to day—ruthlessly prioritizing, and always holding ourselves accountable to a high bar of performance and agility,” an Uber spokesperson said in a statement. “While certainly painful in the moment, especially for those directly affected, we believe that this will result in a much stronger technical organization, which going forward will continue to hire some of the very best talent around the world.”
In July, Uber let go 400 people from its marketing team, many of which worked at regional offices around the world. This latest round also affects regional offices, with 85 percent of those laid off working in the US, 10 percent in the Asia-Pacific region, and 5 percent in Europe, the Middle East, and Africa.
But even as it cuts costs in its marketing, engineering, and product divisions, Uber is ramping up spending in other areas. The company said it would spend $200 million annually to grow its two-year-old Freight business, which includes hiring up to 2,000 new employees over three years.
Uber also plans to spend resources to counteract the expected passage of a state law in California that would make it more difficult for gig economy companies to classify workers as independent contractors. Uber and rival Lyft say they will join together to spend $60 million to fund a ballot initiative in the state to create a new classification for drivers.
If passed, California’s Assembly Bill 5 could force Uber and Lyft to designate drivers as employees, a move both companies admit could throw them into a financial tailspin. Experts estimate labor costs could increase 30 percent for Uber in the state if AB5 is passed.