Lyft Lays Off Employees, Reduces Salaries Amid Decreased Demand for Ride-sharing Services

Lyft Inc (NASDAQ: LYFT) has not been faring too well through the coronavirus pandemic. The American ride-sharing company has announced it has laid off and furloughed a significant portion of its workforce, in a bid to reduce its operating expenses.

In a recent regulatory filing, Lyft announced it has laid off approximately 17% of its labor force, in addition to reducing the base salary amount for remaining employees, effective for a duration of 12 weeks. The salary reductions are slated to begin in May, with a 30% salary reduction for those holding positions in executive leadership, 20% reductions for the company’s vice presidents, and a 10% reduction for all other employees that are still on the payroll. In addition, the company’s board members will also forgo 30% of their compensation in the second quarter.

According to the regulatory filing, Lyft is anticipating to be hit with anywhere between $28 million to $36 million in restructuring costs as a result of the layoffs. Those upfront costs are a significant reflection of employee benefits and severance pay.

Lyft has been hit with a sudden drop in demand for ride-sharing services, as consumers have significantly reduced their travel, opting to instead work from home and avoid unnecessary outings while the country continues to battle the coronavirus pandemic.

Information for this briefing was found via CNBC, Wall Street Journal, and Edison Trends. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.