Lyft is the latest company to announce layoffs, with 683 employees set to lose their jobs. The ride-hailing company is reducing its workforce by 13%, in an effort to reduce operating expenses. This comes a few months after Lyft instituted a hiring freeze and laid off 60 people.
While Lyft is still sticking to its guidance for third-quarter 2022 revenues, contribution margin, and adjusted EBITDA, these layoffs are sure to cause some short-term pain. The company estimates that the layoffs will cost between $27 million to $32 million in severance and benefits. There will also be a stock-based compensation charge and payroll tax expense related to restructuring in the fourth quarter and the first quarter of 2023.
It’s been a tough year for tech companies, with many struggling to adapt to the new normal. Let’s hope that Lyft can weather the storm and come out stronger on the other side.