SAN FRANCISCO -- San Francisco-based Uber has announced plans to lay off 3,700 full-time workers due to the impact of the COVID-19 pandemic.
The company said it laying off the workers to "reduce its operating expenses in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the Company's business."
The cuts will come in the corporation's customer support and recruiting teams. In connection with these actions, the Company estimates that it will incur approximately $20 million related to severance and other termination benefits.
CEO Dara Khosrowshahi is also waiving his base salary for the rest of the year.
Yesterday, the state of California and the cities of San Francisco, Los Angeles and San Diego filed a lawsuit against Uber and Lyft for ignoring California's AB5 gig worker law.
They claim that Uber and Lyft are knowingly and illegally misclassifying drivers as independent contractors rather than employees. The state and cities argue drivers are being deprived of workplace protections during COVID-19 -- like minimum wage and overtime, sick leave, disability insurance, and unemployment insurance. The lawsuit was filed in San Francisco Superior Court.