Ride-hailing firm Lyft said it will lay off about 1,072 employees, or 26% of its workforce, in one of the first steps by the new Chief Executive David Risher, sending its shares up by about 1% on Thursday.
Risher, who took over earlier this month, had recently said the company will “significantly” cut jobs, without providing the number of jobs that would be affected.
Lyft will also eliminate more than 250 open positions and incur about $41 million to $47 million in costs related to severance and employee benefits in the second quarter, it said in an exchange filing.
It will also take additional costs related to stock-based compensations, which it said cannot be estimated at the time.
The money saved from job cuts will be used to support “service-level improvements” for riders and drivers, Lyft said, promising to offer more details in its first-quarter earnings call on May 4.
This is the second round of job cuts by Lyft, which faces competition from bigger rival Uber Technologies in a slowing economy. It had laid off about 683 employees, or 13% of its then workforce, in November.
Coming off pandemic lows, Uber and Lyft are locked in a battle for market share, and investors worry that Lyft’s price cuts to avoid being a distant second in the North American ride-sharing market would squeeze its profit.
Lyft’s stock has so far this year lost 8.6% of its value compared with Uber’s gain of 20%, as of Wednesday’s close.