Lyft Layoffs: Key Details and Impact
What is the reason for Lyft’s layoffs?
Lyft announced it will cease offering standalone dockless bikes and scooters as part of a broader cost-cutting restructuring plan. The move will result in job cuts and a refocus of the company’s efforts on its core ride-share services. This decision comes after the company, which operates Citibike in New York City and similar programs across the U.S., had previously explored divestiture options following strong external interest.
As part of the restructuring, Lyft will discontinue its dockless scooter services in Washington, D.C., and is considering alternatives for its bike and scooter operations in Denver. The company will rebrand its bikes and scooters division as “Lyft Urban Solutions” to better align with its long-term strategy.
What Are the Financial Implications of the Restructuring?
Lyft has largely operated bikes and scooters in partnership with companies like Bird and Spin, making these services accessible through the Lyft app. However, the restructuring will result in significant financial charges of $34 million to $46 million, primarily due to asset disposals, and a reduction of approximately 1% of its 3,000 employees.
The company expects that these cost-saving measures, along with enhanced operational efficiencies and improved sales strategies, will contribute to an increase of $20 million in adjusted operating income annually by the end of next year.
Lyft’s recent financial forecast for the September quarter raised concerns about its ability to compete with industry leader Uber Technologies. Since taking over as CEO last year, David Risher has implemented various cost-reduction measures, increased driver earnings, and introduced new programs aimed at driving demand in the competitive ride-share market.
Recently Laid Off? Know Your Severance Rights
If you’re a non-unionized Lyft employee in Canada facing job loss due to restructuring or downsizing, you could be eligible for a severance package. The amount of severance pay depends on various factors and could extend up to 24 months of compensation. In Ontario, mass layoffs involving 50 or more employees may entitle you to additional severance benefits.
At Whitten & Lublin, our knowledgeable employment lawyers are here to guide you through this challenging time. We’ll ensure you understand your rights and work to secure the severance you’re entitled to. If recent layoffs have impacted you, reach out for a consultation through our online portal or call us at (416) 640-2667.