Uber to lay off 3,700 employees amid coronavirus pandemic

Uber is laying off 3,700 employees as the coronavirus pandemic drives down demand for its service, the company announced Wednesday.

The layoffs in its customer support and recruiting teams account for roughly 15 percent of the ride-hailing giant’s total workforce, according to recent estimates.

Uber expects to spend approximately $2 million on severance and related termination benefits.

In addition to the layoffs, CEO Dara Khosrowshahi is waiving his base salary for the remainder of 2020.

Uber’s investors expect to get a clear picture of the company’s finances when it reports earnings on Thursday.

The coronavirus pandemic has hit the ride-hailing industry hard as many Americans are staying home.

Demand for rides has cratered, leading Lyft to lay off roughly 17 percent of its corporate workforce late last month.

The Information reported last month that executives at Uber had discussed plans to lay off around 20 percent of its employees.

However, the outlet has also reported that Uber has been pursuing new investment opportunities despite its economic situation, including a $170 million lead investment in electric scooter company Lime.

The drivers who depend on both platforms for their income have been the hardest hit by the drop in demand, especially since they lack access to paid leave, health care and unemployment benefits enjoyed by full-time employees.

On Tuesday, California Attorney General Xavier Becerra sued Uber and Lyft, alleging that their drivers should be classified as full-time employees rather than independent contractors under state law.

The lawsuit filed in San Francisco County Superior Court seeks to compel the ride-hailing giants to classify drivers as full employees, demanding civil penalties and restitution for drivers.

The back wages and penalties could add up to hundreds of millions of dollars for the companies that have already cut back their corporate workforces.