Uber to cut 10% of global workforce, Australian jobs affected

Uber, which employed about 34,000 people worldwide at the end of last year, will eliminate roughly 10% of its workforce. 

The company has confirmed that Australian employees are affected, although it has not disclosed how many positions will be cut.

Uber targets management layers and team structures

Dara Khosrowshahi, Chief executive, Uber told employees in a memo that the company’s revenue had nearly tripled over the past five years, but that rapid growth had created additional management layers and unclear ownership of decisions.

The restructuring is aimed at making Uber “simpler and faster”, with the company reducing layers of management and consolidating teams.

Uber has already cut the number of employees sitting seven or more layers below the chief executive by 20%. It has also halved the number of teams with only one or two direct reports.

The company is also tightening its remote-working policy, with only about 1 per cent of employees expected to remain fully remote.

AI not cited as reason for job cuts

Unlike several recent technology companies that have linked workforce reductions to artificial intelligence, Khosrowshahi did not attribute Uber’s job cuts to AI.

Instead, the company plans to reinvest savings from the restructuring in growth initiatives, including its previously announced commitment of more than US$10 billion to autonomous vehicles.

Uber shares rose following the announcement, with the company’s market value now exceeding US$150 billion.

Australian employees among those affected

Australia remains one of Uber’s most lucrative markets. Australians paid more than A$14.5 billion to Uber entities last year for rides, food delivery and other services, an increase of more than A$2 billion from the previous year.

The Australian business generated A$2.12 billion in gross profit, while almost all of this was offset by administrative expenses, including A$1.85 billion in unspecified service fees paid to related overseas companies. 

Uber’s Australian arm reported a net profit of A$8.7 million and paid A$15.58 million in income tax.

Uber had 568 employees in Australia as of 31 December.

Gig economy workers excluded from cuts

The global workforce reduction does not include the more than 100,000 people who drive or deliver for Uber in Australia, as they are classified as contractors rather than employees.

Their pay and working conditions have also recently changed following new gig economy rules. 

Minimum standards for food delivery workers came into effect on 17 August, establishing an earnings floor of A$31.30 an hour for bicycle riders and A$32 for car drivers during engaged time.

A separate application covering rideshare drivers remains before the Fair Work Commission.

Uber is also contesting an A$81.5 million payroll tax dispute with the NSW government in the High Court. The company previously lost the case in the NSW Court of Appeal, with the outcome potentially setting a precedent across other states.