The ride-hailing company Lyft Inc (LYFT.O) announced on Thursday that it would let go of 13% of its workforce, or roughly 683 workers, as part of its latest cost-cutting measure to address the slowing economy.
Companies from all industries are laying off employees and scaling back operations to maintain profits as consumer spending is negatively impacted by decades-high inflation and business costs rise.
The most recent action by Lyft is anticipated to result in a charge between $27 million and $32 million in the fourth quarter. It comes after a hiring halt in September and 60 job layoffs earlier this year.
Due to the release of its third-quarter earnings results on Monday, the business stated that the layoffs would not affect its earlier forecast. It anticipates revenue between $1.04 and $1.06 billion and adjusted core profit between $55 and $65 million.
Shares of the business in San Francisco, California, were down by 1%.
According to a statement from Lyft, “the announced decrease in force is a proactive action as part of the company’s annual planning.”
Businesses that rely on gig workers, including Lyft and Uber Technologies Inc (UBER.N), have recently been concerned that a Labor Department proposal to limit independent contractors’ use could increase expenses.
However, according to analysts, the Biden administration’s initiatives might be derailed by court challenges and industry organisations lobbying for adjustments.
In the United States and a few Canadian cities, Lyft, Inc., a San Francisco, California-based company, provides mobility as a service, ride-hailing, vehicles for hire, motorised scooters, a bicycle-sharing system, rental cars, and food delivery.
Lyft does not own automobiles but makes money from each reservation. The consumer receives a quotation for the fare in advance, but it can change according to the supply and demand in the area at the same time of the booking.
Lyft is the second-largest ridesharing firm in the United States as of 2022, behind Uber, with a 28% market share.