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Uber lays off 400 as cost-cutting efforts ramp up

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Uber is laying off about one third of its 1,200-person strong marketing department in an effort to slash costs and make operations more efficient following its public debut and first quarter losses of $1 billion.

The layoffs were first reported by The New York Times.

About 400 people in Uber’s marketing department were laid off across its 75 offices globally, according to the company. Uber’s latest public global headcount was 24,494 global employees as of March 31, 2019.

Jill Hazelbaker, who leads marketing and public affairs at Uber, and CEO Dara Khosrowshahi told employees Monday that the marketing team would have a more centralized structure, according to an internal email viewed by TechCrunch. 

The reorganized marketing team will be under the leadership of Mike Strickman, vice president of performance marketing, who joined from TripAdvisor a month ago, and another soon-to-be-hired head of global marketing. Strickman will oversee performance marketing, CRM and analytics, while the global marketing executive will manage the heads of product marketing, brand, Eats, B2B, research, planning and creative.

The layoffs are the latest cost-driven changes to occur at the company since it went public in May.

Many of Uber’s teams are “too big, which creates overlapping work, makes for unclear decision owners, and can lead to mediocre results,” Khosrowshahi said in an email sent to employees and shared with TechCrunch. “As a company, we can do more to keep the bar high, and expect more of ourselves and each other.”

Khosrowshahi said the restructuring aims to put the marketing team, and the company, back on track.

“Today, there’s a general sense that while we’ve grown fast, we’ve slowed down. You can see it in Pulse Survey feedback and All Hands questions, and you can feel it in much of our day-to-day work. This happens naturally as companies get bigger, but it is something we need to address, and quickly,” he wrote.

Uber’s first quarterly earnings report as a publicly traded company gave a snapshot of a growing business with stunning operational losses. Uber’s revenue grew 20%, to $3.1 billion, compared to $2.5 billion in the same period last year. And its gross bookings rose 34%, to $14.6 billion, in the first quarter, with Uber Eats driving much of that growth.

But its loss from operations exploded 116%, to $1 billion, in the first quarter compared to the same year-ago period.

In June, chief operating officer Barney Harford  and chief marketing officer Rebecca Messina stepped down as part of an organizational shakeup put into motion just a month after the ride-hailing company went public.

At the time, Khosrowshahi explained in an email to employees that the changes were prompted by his decision to more directly control core parts of the business. Khosrowshahi told employees that he wants to be even more involved in the day-to-day operations of its biggest businesses, the core platform of Rides and Eats, and has decided they should report directly to him.

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