SAN FRANCISCO—Uber CEO Dara Khosrowshahi sent a company-wide email on Monday, May 18, announcing the closure of the company’s Pier 70 facility in downtown San Francisco. The company will also either shut down or consolidate 44 other offices worldwide.
The Pier 70 facility, which spans over 130,000 square feet, has been home to the development of self-driving cars, air taxis, and other Uber projects. Some of the office’s 500 employees will be laid off while others will move to Uber’s new headquarters in Mission Bay, San Francisco, which has not opened yet.
Khosrowshahi’s email, titled “A very difficult day, and what’s next,” stated that in addition to site closures, approximately 3,000 Uber employees globally will be let go. This totals 6,700 layoffs since the start of May and a 25% overall shrinkage of the company’s workforce.
With California’s mandatory shelter-in-place order, Uber has seen an 80% decrease in ride-hailing profits, which are typically the company’s main source of revenue, according to Khosrowshahi.
A filing from the Securities and Exchange Commission, released May 18, detailed that Uber expects to spend about $110 million to $140 million on employee severance and termination packages, as well as incur $65 to $80 million in costs related to the facility shutdowns.
Additionally, the report stated that Uber’s Board of Directors will let go of their annual cash retainer for the rest of the year. An SEC filing from May 2 also noted that Khosrowshahi will waive his base salary until December 31, 2020.
In his email, Khosrowshahi outlined a three-prong strategy to keep Uber afloat: focus on the company’s core services like its food delivery platform, Uber Eats; build a cost-efficient structure; and concentrate its employees in locations with “key markets/hubs.”
The company has estimated that this restructuring will result in aggregate savings of at least $1 billion annually.
In terms of what lies ahead for Uber, Khosrowshahi said, “Having learned my own personal lesson about the unpredictability of the world from the punch-in-the-gut called COVID-19, I will not make any claims with absolute certainty regarding our future.”
