Uber lays off 435 people on engineering, product teams

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Uber lays off 435 people on engineering, product teams

Post by SolarpunkFan » 2019-09-10 06:37pm

TechCrunch
Uber has laid off 435 employees across its product and engineering teams, the company announced today. Combined, the layoffs represent about 8% of the organization, with 170 people leaving the product team and 265 people leaving the engineering team.

The layoffs had no effect on Eats, which is one of Uber’s top-performing products, and Freight, according to a source familiar with the situation.

Meanwhile, the company is lifting the hiring freeze on the product and engineering teams that has been in effect since early August, according to the source.

“Our hope with these changes is to reset and improve how we work day to day — ruthlessly prioritizing, and always holding ourselves accountable to a high bar of performance and agility,” an Uber spokesperson told TechCrunch. “While certainly painful in the moment, especially for those directly affected, we believe that this will result in a much stronger technical organization, which going forward will continue to hire some of the very best talent around the world.”

Of those laid off, more than 85% are based in the U.S.; 10% are in Asia-Pacific and 5% are in Europe, the Middle East and Africa, according to the source.

The layoffs came after Uber CEO Dara Khosrowshahi asked every member of his executive leadership team if they were to start from scratch, would their respective organizations look the way they do today?

“After careful consideration, our Engineering and Product leaders concluded the answer to this question in many respects was ‘no,’ ” the spokesperson said.

Those leaders are Chief Product Officer Manik Gupta and CTO Thuan Pham. They looked at team size, identified duplicate roles and overlapping work, as well as individual performance to determine who would be laid off, the source said. That’s how they landed on focusing more on the design and research teams from the product side.

“Previously, to meet the demands of a hyper-growth startup, we hired rapidly and in a decentralized way,” the spokesperson said. “While this worked for Uber in the past, now that we have over 27,000 full-time employees in cities around the world, we need to shift how we design our organizations: lean, exceptionally high-performing teams, with clear mandates and the ability to execute faster than our competitors.”

These layoffs come shortly after Uber laid off 400 people from its marketing team. In Q2 2019, Uber lost more than $5 billion — its biggest quarterly revenue loss to date — though a chunk of its losses were a result of stock-based compensation expenses for employees following the company’s IPO in May. While it may seem these layoffs are in response to those quarterly losses, Uber says the conversations have been ongoing.

As Uber lays off its W-2 employees, it’s simultaneously investing in ensuring its 1099 independent contractors remain classified in that way. In light of gig worker protection bill AB-5 advancing through the California legislature, Uber, along with Lyft and DoorDash, put $30 million toward a 2020 ballot initiative that would enable them to keep their drivers as independent contractors. If AB-5 passes, Uber would see a significant uptick in costs.

Uber is currently trading at $33.14 per share, well below its IPO pricing of $45.

Here’s Uber’s full statement:

Our CEO has asked everyone on our management team a simple but important question: if we started from scratch, would we design our organizations as they stand today? After careful consideration, our Engineering and Product leaders concluded the answer to this question in many respects was no. Previously, to meet the demands of a hyper-growth startup, we hired rapidly and in a decentralized way.

While this worked for Uber in the past, now that we have over 27,000 full-time employees in cities around the world, we need to shift how we design our organizations: lean, exceptionally high-performing teams, with clear mandates and the ability to execute faster than our competitors.

Today, we’re making some changes to get us back on track, which include reducing the size of some teams to ensure we are staffed appropriately against our top priorities. These were incredibly difficult calls as it means some of our employees no longer have a role, specifically around 170 people in our Product group and 265 people in Engineering, which is roughly 8 percent of those two orgs.

Our hope with these changes is to reset and improve how we work day to day—ruthlessly prioritizing, and always holding ourselves accountable to a high bar of performance and agility. While certainly painful in the moment, especially for those directly affected, we believe that this will result in a much stronger technical organization, which going forward will continue to hire some of the very best talent around the world.
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Re: Uber lays off 435 people on engineering, product teams

Post by RogueIce » 2019-09-11 07:28am

we need to shift how we design our organizations: lean, exceptionally high-performing teams, with clear mandates and the ability to execute faster than our competitors
Translated from corporate-speak: "do more with less"

Payroll is regarded as one of the top controllable expenses around. If you're not doing well, slash the shit out of it and force everyone to work harder, and hope you don't cut too deep and rebound. If you're doing well, slash it a little at a time and force everyone to work harder, until you hit that point where you've cut too much and then you can "invest in talent" and re-hire a little.

Because it's all about that growth. Not just increasing profit to adjust for inflation, but going beyond that. Your shareholders always want more, more, more, not just to stay steady. And eventually you'll hit the point where you can't do it by growth and expansion alone, so you have to cut costs somewhere.

And the easiest place to do that, in executives' eyes, is payroll.
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Re: Uber lays off 435 people on engineering, product teams

Post by K. A. Pital » 2019-09-11 08:04am

I laid my thoughts out in the other thread. Nationalize the thing and hand over to a worker’s council. Remove bourgeois.
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Re: Uber lays off 435 people on engineering, product teams

Post by madd0ct0r » 2019-09-11 03:06pm

K. A. Pital wrote:
2019-09-11 08:04am
I laid my thoughts out in the other thread. Nationalize the thing and hand over to a worker’s council. Remove bourgeois.
To be honest, given how Uber has accidently pushed the drivers into organisational levels bordering on a union, it might not be too hard to setup without waiting. You need an app capable of handling payments, a server capable of handling the app and sufficent local knowledge to do the checks and licencesing for the local city, with drivers working for uber handing out adverts for their new app.
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Re: Uber lays off 435 people on engineering, product teams

Post by Gandalf » 2019-09-11 05:09pm

Yeah, it shouldn't be too hard to run as a government agency. It could fall under public transport infrastructure presumably.
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Re: Uber lays off 435 people on engineering, product teams

Post by Straha » 2019-09-11 05:54pm

Jacobin has a pretty good article about how to Socialize Uber, that I highly recommend.
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Re: Uber lays off 435 people on engineering, product teams

Post by SolarpunkFan » 2019-09-12 08:23pm

RogueIce wrote:
2019-09-11 07:28am
we need to shift how we design our organizations: lean, exceptionally high-performing teams, with clear mandates and the ability to execute faster than our competitors
Translated from corporate-speak: "do more with less"
I actually thought about whether I should have quoted that bit in the OP and then said "Is that what they're calling it now?". :P
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Re: Uber lays off 435 people on engineering, product teams

Post by bilateralrope » 2019-09-13 12:16am

Gandalf wrote:
2019-09-11 05:09pm
Yeah, it shouldn't be too hard to run as a government agency. It could fall under public transport infrastructure presumably.
Why is a taxi company that doesn't own the taxis a desirable part of a public transport infrastructure ?

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Re: Uber lays off 435 people on engineering, product teams

Post by bilateralrope » 2019-09-13 12:23am

I'm not sure if this article deserves it's own thread or not.

California passes bill that threatens Uber and Lyft’s business model
Governor Gavin Newsom is expected to sign the overhaul of California labor law.
TIMOTHY B. LEE - 9/13/2019, 4:10 AM


Both houses of California's legislature have passed sweeping legislation requiring businesses to treat more of their workers as employees rather than independent contractors. As a result, more workers will enjoy protections like the minimum wage and benefits such as unemployment insurance. The bill is now on its way to Governor Gavin Newsom, who is expected to sign it.

The law will apply across the California economy, but it could have particularly stark consequences for Uber and Lyft—both of which are based in the Golden State. The companies currently treat their drivers as independent contractors, and their entire business model is built around that assumption.

In the hours after the legislation cleared the California legislature, Uber and Lyft both blasted the law and vowed to seek changes.

"California is missing a real opportunity to lead the nation by improving the quality, security and dignity of independent work," Uber's Tony West said. In an emailed statement, Lyft argued that the "overwhelming majority of rideshare drivers" want "a thoughtful solution that balances flexibility with an earnings standard and benefits"—a standard Lyft argues that the new legislation doesn't meet.

Uber and Lyft are still hoping that Governor Newsom will push through follow-up legislation specifically for "gig economy" workers. If that doesn't happen, Uber, Lyft, and Doordash have also vowed to spend $30 million backing a ballot initiative to overturn the law.

But if those efforts fail, then "gig economy" companies could be forced to rethink their business models. And the results may not be entirely positive for Uber and Lyft drivers.

More workers will be employees in California

Labor law draws a basic distinction between employees and independent contractors. If you're an employee, you have a boss who sets your schedule, tells you what kind of work to do, and pays you at least minimum wage. Independent contractors, on the other hand, are people who—at least theoretically—run their own, separate businesses. Think about a plumber you hire once to fix a leaky pipe, for example.

In recent years, employers have pushed the legal envelope, trying to classify as many workers as possible as independent contractors. Worker rights advocates have objected, arguing that these workers were being wrongfully denied protections they were entitled to under labor law.

One of those conflicts reached the California Supreme Court last year. A same-day delivery company called Dynamex once treated its drivers as employees, but it re-classified them as independent contractors in 2004. Some of those drivers sued, arguing that they should still be considered employees under California law.

Last year the California Supreme Court sided with the drivers, and in the process it established new, broader criteria for determining who was an employee. Under the test, a worker must be treated as an employee unless three conditions are met:
(a) The worker is free from control and direction over performance of the work; (b) the work provided is outside the usual course of the business for which the work is performed; and (c) the worker is customarily engaged in an independently established trade, occupation, or business
This simpler test means that a lot more workers will be classified as employees. But critics worried it could go too far, upending the businesses of professionals who have long operated as independent contractors.

So the California legislature passed legislation to ratify the Dynamex ruling while also limiting its scope. It carves out a number of exemptions—largely for high-earning professionals like lawyers, architects, engineers and accountants. People in these skilled occupations often operate their own independent firms and have significant bargaining power.

Under the new law, photographers, writers, and cartoonists can more easily be independent contractors if they sell fewer than 35 pieces to a single client in a year. If they sell more than that then they're likely to be classified as employees.

Uber, Lyft, Doordash, and other "gig economy" companies lobbied hard for a similar exemption covering their workers, but they came up short. So Uber and Lyft drivers—as well as delivery drivers for other on-demand services—may soon be legally considered employees of these companies.

Uber disputes that. In a Wednesday conference call, Uber chief legal officer Tony West argued that driving a car is "outside the usual course" of Uber's business. "Several previous rulings have found that drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces," West said.

For example, a Vermont official accepted that reasoning in a 2017 ruling using a legal standard similar to the one that now applies in California. But it's widely expected that courts in California won't see the issue the same way.

The new law could mean changes for Uber and Lyft drivers

A big reason Uber and Lyft have been opposing this bill so ferociously is that their current business model doesn't fit well into conventional labor law categories.

Conventional labor law assumes that a worker goes to a job, clocks in, works, for a few hours, and then clocks out. In this model, the employer decides what work the worker should do; in exchange the worker is guaranteed to make at least minimum wage. Employers set worker schedules; to protect them, California law guarantees workers overtime pay and mandatory breaks.

By contrast, Uber and Lyft drivers have complete control over where and when they work. In this model, it's not clear that mandatory overtime pay helps workers, since workers never face pressure from the platforms to work longer hours. If platforms are forced to pay time-and-a-half for overtime hours, they may just ban drivers from working overtime.

A minimum wage guarantee is likely to trigger significant changes to the ride-sharing model. It's helpful here to look at New York City, where a $17.22 minimum wage for ride-hail drivers went into effect earlier this year.

To make a profit, Lyft needs to make sure drivers bring in at least $17.22 per hour in fares. To accomplish this, Lyft has imposed a new policy that (in the words of Harry Campbell) "prevents drivers from logging on to the company’s app during periods of low demand." Under the new rules, Lyft drivers in New York "have to wait until ride requests pick up, or drive to a busier neighborhood."

Whether these changes ultimately benefit drivers is an open question. Probably it will benefit some drivers and harm others. Full-time drivers may not be affected very much, as Lyft exempts its most active drivers from these restrictions. On the other hand, the changes may be bad for part-time drivers who care more about flexible schedules than maximizing earnings.

We can expect similar changes in California if the new legislation ultimately causes drivers to be classified as employees. Companies will likely restrict how many people drive for them and where and when they can work. Workers who are able to get work may enjoy higher earnings, but they'll lose a bit of autonomy over their schedules. Meanwhile, with fewer drivers on the road, customers may see higher fares and longer wait times.

But the full implications won't be clear until the new rules make their way through the courts. Uber and Lyft aren't going to give up their current business model without a fight.
This should accelerate Uber's slide into bankruptcy. A bankruptcy I see as necessary to remind people that if the only compliment they can give a business is that it's "disruptive", then it's not a good business.

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Re: Uber lays off 435 people on engineering, product teams

Post by K. A. Pital » 2019-09-13 03:39am

So Uber will be destroyed if it’s forced to eat extra costs, but what about the drivers? Will they get any help after the “gig driver” company goes down?
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Re: Uber lays off 435 people on engineering, product teams

Post by Broomstick » 2019-09-13 04:32am

Of course not - you're aware enough of how the US system works. They won't even get unemployment insurance because they worked as "independent contractors". They'll have to find some other work to do or become destitute.
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Re: Uber lays off 435 people on engineering, product teams

Post by MKSheppard » 2019-09-13 03:09pm

Sad. I like Uber because it's something a deaf person can actually use; as opposed to a traditional taxicab company.
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Re: Uber lays off 435 people on engineering, product teams

Post by Bedlam » 2019-09-14 04:16am

MKSheppard wrote:
2019-09-13 03:09pm
Sad. I like Uber because it's something a deaf person can actually use; as opposed to a traditional taxicab company.
What is it about the Uber model that is particularly deaf friendly? Is it simply the fact you can order transport via an app? If so there isn't any reason a traditional taxi company can't do that (and many do now) or is there something about using unlicensed drivers that provides a different service?

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Re: Uber lays off 435 people on engineering, product teams

Post by Ace Pace » 2019-09-14 04:44am

Bedlam wrote:
2019-09-14 04:16am
MKSheppard wrote:
2019-09-13 03:09pm
Sad. I like Uber because it's something a deaf person can actually use; as opposed to a traditional taxicab company.
What is it about the Uber model that is particularly deaf friendly? Is it simply the fact you can order transport via an app? If so there isn't any reason a traditional taxi company can't do that (and many do now) or is there something about using unlicensed drivers that provides a different service?
If the argument is that taxi companies can also do it, well, clearly they mostly aren't doing it. Now with Uber eating their lunch I've seen more taxi companies in Europe deliver applications but none that are as polished, or useful outside a single metro area.
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Re: Uber lays off 435 people on engineering, product teams

Post by Gandalf » 2019-09-14 11:54am

Also, Uber is easier for some minorities, especially if they're in areas where taxis will just ignore people of a certain colour.
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Re: Uber lays off 435 people on engineering, product teams

Post by ray245 » 2019-09-14 02:23pm

Taxi companies can be quite complacent if they have full control over a market. In this scenario, having something that can challenge their monopoly can be beneficial in some ways.

And despite what people have said about the fear of Uber replacing or taking away driving jobs from people, it seems quite unlikely that such fears could be realised. Because Taxi companies ARE responding to the challenge and finding ways to ensure traditional services can be a good competition against Uber.
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Re: Uber lays off 435 people on engineering, product teams

Post by Lonestar » 2019-09-14 03:28pm

someone delete this double post
Last edited by Lonestar on 2019-09-14 03:28pm, edited 1 time in total.
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Re: Uber lays off 435 people on engineering, product teams

Post by Lonestar » 2019-09-14 03:28pm

Ace Pace wrote:
2019-09-14 04:44am


If the argument is that taxi companies can also do it, well, clearly they mostly aren't doing it. Now with Uber eating their lunch I've seen more taxi companies in Europe deliver applications but none that are as polished, or useful outside a single metro area.
Taxi apps suck in the Mid-Atlantic as well, and(at least in the DC Area) they are notorious for doing the "we only accept cash" thing.

We had a flight at 0515 so I set up a taxi schedule, big ole "we accept credit", said yup we accept it, and as we were pulling out "oh huh it's broken" "we don't carry cash" "i can stop you at a ATM". as it happened between us we had the cash on hand, but as we got out at the airport he tried to hand us his card to call him directly in the future and I ripped it in half, tossed it in the back seat and said "this only cash shit is why you're losing to Uber".

the end no moral
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Re: Uber lays off 435 people on engineering, product teams

Post by ray245 » 2019-09-15 02:40am

Taxi companies in some places can outright rip you off, if you don't negotiate with them about the price of the ride prior to getting into the car.
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