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Uber plans to use layoff savings to reduce fares and improve services
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Uber plans to use layoff savings to reduce fares and improve services

Uber plans to use part of the savings generated by laying off approximately 3,300 employees to lower travel costs for users. Additionally, the company aims to enhance service availability on the app and continue investing in its expansion program.

The cuts affected 10% of the corporate staff, even after the company reported quarterly results that exceeded analyst projections. CEO Dara Khosrowshahi explained that the decision was made because the company is in a strong position.

The layoffs were announced at the beginning of September and account for 10% of Uber's corporate team. Khosrowshahi stressed that this was the opportune moment to implement cost reduction.

During a presentation at the Goldman Sachs Communacopia + Technology conference on Thursday, the executive stated: 'We are in a position of strength, not weakness.'

Uber had also demonstrated performance exceeding analyst expectations in its recent quarterly reports. On Thursday, the company's shares rose by about 2% after the company informed the SEC that Khosrowshahi added approximately US$ 10 million (equivalent to about R$ 52.1 million) in Uber stock to his holdings.

The savings obtained from the dismissals will not only be applied to reducing expenses; there is an intention to reinvest part of this amount directly into the service. According to Khosrowshahi, these resources will be used in several areas.

Uber also intends to allocate a portion of the money saved on insurance to lower ride prices. The CEO believes this initiative will help retain passengers using the app.

The justification presented by Khosrowshahi lies in the current context of the company. Instead of waiting for a possible change in the scenario, Uber chose to cut costs while the business is in a favorable condition. He stated: 'Some companies wait. We do not believe in waiting.'

Uber's overall strategy consists of converting part of the savings from personnel reduction and insurance costs into lower fares, a better ride offering, and continuous investments in the platform. The final result of this resource allocation will depend on how the company decides to use them.

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Uber cuts 3,300 jobs, focusing on developing AI-based robotaxis
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www.aajtak.in

Uber cuts 3,300 jobs, focusing on developing AI-based robotaxis

Despite stable business growth and increased revenue, Uber has decided to lay off approximately 3,300 employees. This reduction accounts for about 10% of the company's total global workforce.

The reason for this large-scale decision is Uber's drive to operate faster and more efficiently. This was announced by CEO Dara Khosrowshahi in a memo sent to employees.

Over the past five years, Uber has significantly expanded its operations, launching numerous new products and scaling up the company. However, growth brought a problem: the increase in company size led to an increase in management layers and teams.

This, in turn, slowed down the decision-making process. The number of meetings and the need for coordination between different teams increased, as did ambiguity in the distribution of job responsibilities. According to the CEO, employees were spending more time coordinating actions than actually working. To resolve this issue, Uber decided to cut about 3,300 jobs.

The company particularly reduced several management levels. The number of employees working seven or more levels below the CEO was decreased by 20%. Additionally, the number of small teams consisting of only one or two people was cut by roughly half.

In the future, Uber is placing a major bet on the autonomous, or self-driving, vehicle business. The company recognizes that the robotaxi market can grow rapidly. Therefore, Uber intends to direct its resources and funds toward developing this new technology.

The company's plan is to reduce costs where a large number of people and management are not required, and to invest the freed-up resources in future technologies. The company stated that these changes will allow potential to be directed towards growth, innovation, and an autonomous future.

In addition to the layoffs, Uber made significant changes to its remote work policy. Going forward, only about 1% of the company's employees will be able to work fully remotely. Most staff will have to perform their duties in the office, and the company will maintain its hybrid policy, which requires three days in the office.

It is important to note that the Uber CEO did not directly link the layoffs to the influence of artificial intelligence. He emphasized that the company had become too complex and now needed to become more compact and agile. Nevertheless, the influence of AI may appear in the future, as the rapid growth of robotaxis will require a serious overhaul of Uber's business model.

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