After losing more than $50 million a day in the second quarter of 2019, Uber is tightening its belt. The company announced the layoffs of 435 people in its product and engineering teams Tuesday, which works out to around 8% of both teams, TechCrunch reports. The company said in a statement that CEO Dara Khosrowshahi "asked everyone on our management team a simple but important question: if we started from scratch, would we design our organizations as they stand today?" The company says that after "careful consideration," the leaders of its engineering and product teams "concluded the answer to this question in many respects was 'no.'" Sources say the job cuts, which follow the layoffs of 400 people from Uber's marketing team in July, do not affect Uber Eats or Uber Freight.
The $5.2 billion loss that Uber posted for the second quarter was its biggest-ever quarterly loss and its share price is currently $33.14, well below the $45 IPO level in May. "Everybody knows that Uber can't lose billions of dollars a quarter forever, but it's always been a question of when the money might run out," Harry Campbell, founder of the Rideshare Guy website, tells the New York Times. "We've seen Uber institute a number of cost-cutting measures at the driver and rider level and now the cuts are coming to the corporate side of the business in order to move towards profitability." Gizmodo notes that the layoffs come as California lawmakers prepare to vote on requiring Uber and similar companies to classify their drivers as employees, not contractors. (Read more Uber stories.)