Uber Technologies announced it will lay off approximately 3,300 employees, representing 10% of its workforce. This move marks the company's most significant job cuts since the COVID-19 pandemic and aims to address the growing challenge posed by the rise of robotaxis.
CEO Dara Khosrowshahi stated in a company-wide note that the layoffs are intended to create a leaner organization with clearer ownership and faster decision-making. The company plans to reinvest the resulting savings into growth, innovation, and future-critical capabilities. Khosrowshahi did not attribute the cuts to artificial intelligence, despite its role in broader industry layoffs this year.
Uber shares saw a nearly 1% increase following the announcement. However, the stock has lagged the S&P 500 and rival Lyft this year, with an approximate 8% decline attributed to concerns over increasing competition.
In addition to ride-hailing, Uber is facing pressure in its food delivery service, Uber Eats, from competitors like DoorDash, Instacart, and local delivery platforms. The company has sought to scale its delivery operations through acquisitions, including its $14.8 billion deal for Delivery Hero.
The competitive landscape is intensifying with the advancement of autonomous vehicle technology. Reports indicate growing tension between Uber and Waymo, a leading robotaxi operator. Waymo vehicles operate through Uber's app in cities such as Austin and Atlanta, but the company is also expanding into new markets independently. Tesla and other competitors are also heavily investing in driverless car technology, raising concerns that a larger fleet of robotaxis could diminish Uber's role as an intermediary between passengers and drivers.
In response, Uber plans to invest over $10 billion in robotaxis in the coming years. This strategy involves supporting companies that develop autonomous driving systems and positioning Uber as a primary marketplace for driverless rides. Analyst Adam Ballantyne noted that scaling autonomous vehicle technology requires a different employee profile and organizational structure than one built around human drivers and their associated costs.
The organizational overhaul will also reduce the number of employees reporting seven or more layers below the CEO by 20%. Additionally, the company will decrease the number of teams with only one or two direct reports by nearly half, consolidate some teams, and concentrate staff presence around key operational hubs. Fully remote roles will be limited to approximately 1% of staff, while the company maintains its three-day in-office work policy.
These layoffs are the largest since May 2020, when Uber reduced its workforce by approximately 6,700 employees, or nearly a quarter of its staff, due to a pandemic-induced demand collapse. The company has also reportedly faced significant costs related to AI adoption, with employees consuming their entire 2026 budget for the technology within the first four months of the year. Uber employed about 34,000 people globally at the end of the previous year.