UBER - Why did Lyft stock go up today? More job cuts are coming

2023-04-21 16:09:40 ET

Lyft ( NASDAQ: LYFT ) finished the Friday trading session with a gain of more than 6% after CEO David Risher confirmed the company would "significantly" reduce the size of its workforce.

Risher, who took over the top spot earlier this month, told employees that Lyft ( LYFT ) would use the savings to bring costs down and "deliver affordable rides, compelling earnings for drivers, and profitable growth."

"All of these require us to reduce our size and restructure how we’re organized," Risher wrote.

The Wall Street Journal reported on Friday that Lyft ( LYFT ) could let go as much as 30% of the company's full-time employees, impacting at least 1,200 workers.

As part of the restructuring, Risher said Lyft ( LYFT ) employees will receive at least 10 weeks of pay with additional pay for people who have been at the company at least four years. Workers who have been impacted by the layoffs will also receive healthcare coverage through the end of October 31 and receive an accelerated equity vesting for the May 20 vesting date.

The reductions are the company's third-round of job cuts since last July.

In November, Lyft ( LYFT ) said it would lay off 13% of its workforce, which impacted 683 employees, Lyft ( LYFT ) said in a filing with the Securities and Exchange Commission.

In July, Lyft ( LYFT ) laid off roughly 60 employees and began to reorganize its global operations and shutter some regions. The company also stopped renting cars to riders, instead working with existing car rental companies.

Risher, who previously served on the company's board of directors, replaced the company's two co-founders, Logan Green and John Zimmer, as the ride-sharing firm struggles in competition with Uber Technologies ( UBER ).

Green and Zimmer, who previously served as CEO and President, moved into non-executive roles as Chair and Vice Chair of the company's board, respectively.

Following his appointment as CEO, Risher said Lyft ( LYFT ) intended to be "price competitive" but that it was not for sale .

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