As the coronavirus pandemic continues to haunt businesses around the world, companies are taking extreme steps to sail through these challenging times. From layoffs to pay cuts and even going bankrupt, companies around the world are facing the worst economic crisis in decades. Crisis-hit Uber, which is struggling to survive in these challenging times, has announced another round of layoffs - this time affecting 3,000 employees.

Layoffs at Uber

The announcement comes only days after the popular ride-hailing service had laid off 3,700 employees due to the economic challenges resulting from the COVID-19 pandemic. In a letter to the employees, Uber CEO Dara Khosrowshahi explained the decision he had to take to keep the company alive, future plans and making sure the departing employees are not left without any financial support.

Uber CEO Dara Khosrowshahi
The chief executive of Uber Technologies Inc, Dara KhosrowshahiREUTERS/Adriano Machado/File Photo

In addition to the layoffs, Uber announced that it will be shutting down 45 officers globally and almost all the departments will be affected by the layoffs. The company's Incubator and AI Labs will also be closed. Khosrowshahi acknowledged that the UberEats business, unlike its ride-hailing service, is doing great, but not as great to pull the entire company out of this storm. The rides business, which contributed to the company's highest revenue, fell 80 percent.

"Having learned my own personal lesson about the unpredictability of the world from the punch-in-the-gut called COVID-19, I will not make any claims with absolute certainty regarding our future. I will tell you, however, that we are making really, really hard choices now, so that we can say our goodbyes, have as much clarity as we can, move forward, and start to build again with confidence," Khosrowshahi wrote in his letter to the employees.

Uber reported $29 billion loss in the first quarter. The new changes, including the two rounds of layoffs, are designed to save $1 billion annually. Khosrowshahi, who made $1 million in 2019, announced that he would waive his own base salary for the rest of the year. Even the board of directors at Uber have decided to let go off their cash retainers for 2020, CNBC reported.

Uber layoffs continueReuters

What do fired employees get?

Uber has a restructuring plan in motion and it could incur up to $220 million in charges related to severance, health benefits and office closure costs, a federal filing has revealed. According to Khosrowshahi's letter, employees that have been fired will receive severance benefits, healthcare coverage, and an alumni talent directory.

Here's the complete text from Uber's CEO:

Team Uber:

These have been unprecedented and challenging times for everyone—our societies, our governments, our families, our economies, all around the world. They've also been challenging for Uber, and many of you, as you've waited for us to define the road ahead. I've said clearly that we had to take tough action to resize our company to the new reality of our business, and that I would come back to you this week with the specifics.

Today I have the specifics: we have made the incredibly difficult decision to reduce our workforce by around 3,000 people, and to reduce investments in several non-core projects. As a leadership team we had to take the time to make the right decisions, to ensure that we are treating our people well, and to make certain that we could walk you through our decision making in the sort of detailed and transparent manner you deserve.

Where we started and hard choices

We began 2020 on an accelerated path to total company profitability. Then the coronavirus hit us with a once-in-a-generation public health and economic crisis. People are rightfully staying home, and our Rides business, our main profit generator, is down around 80%. We're seeing some signs of a recovery, but it comes off of a deep hole, with limited visibility as to its speed and shape.

You've heard me say it before: hope is not a strategy. While that's easy to say, the truth is that this is a decision I struggled with. Our balance sheet is strong, Eats is doing great, Rides looks a little better, maybe we can wait this damn virus out...I wanted there to be a different answer. Let me talk to a few more CEOs...maybe one of them will tell me some good news, but there simply was no good news to hear. Ultimately, I realized that hoping the world would return to normal within any predictable timeframe, so we could pick up where we left off on our path to profitability, was not a viable option.

I knew that I had to make a hard decision, not because we are a public company, or to protect our stock price, or to please our Board or investors. I had to make this decision because our very future as an essential service for the cities of the world—our being there for millions of people and businesses who rely on us—demands it. We must establish ourselves as a self-sustaining enterprise that no longer relies on new capital or investors to keep growing, expanding, and innovating.

We have to take these hard actions to stand strong on our own two feet, to secure our future, and to continue on our mission.

I know that none of this will make it any easier for our friends and colleagues affected by the actions we are taking today. To those of you personally impacted, I am truly sorry. I know this will cause pain for you and your families, especially now. Many of you will be affected not because of the quality of your work, but because of strategic decisions we made to discontinue certain areas of activity, or projects that are no longer necessary, or simply because of the stark reality we face. You have been a huge part of this company and every day forward we will build on the foundations that you established, brick by brick.

Our decisions and the road forward

We have decided to re-focus our efforts on our core. If there is one silver lining regarding this crisis, it's that Eats has become an even more important resource for people at home and for restaurants; and delivery, whether of groceries or other local goods, is not only an increasing part of everyday life, it is here to stay. We no longer need to look far for the next enormous growth opportunity: we are sitting right on top of one. I will caution that while Eats growth is accelerating, the business today doesn't come close to covering our expenses. I have every belief that the moves we are making will get Eats to profitability, just as we did with Rides, but it's not going to happen overnight.

So we need to fundamentally change the way we operate. We need to make some really hard decisions about what we will and won't do going forward, based on a few principles:

We are organizing around our core: helping people move, and delivering things.

We are building a cost-efficient structure that avoids layers and duplication and can scale, at speed.

We are being intentional with our location strategy focused on key markets/hubs.

Mac will now lead a unified Mobility team, which will include Rides and, as of today, Transit. Mac will continue to manage our cross-cutting functions like Safety & Insurance, CommOps, U4B, and Business Development, the latter of which will be centralized across Rides, Eats, and Freight under Jen. Pierre will lead what we will call "Delivery" internally, encompassing Eats, Grocery and Direct.

Given the necessary cost cuts and the increased focus on core, we have decided to wind down the Incubator and AI Labs and pursue strategic alternatives for Uber Works. Due to these decisions, Zhenya has decided it makes sense to move on from Uber. Zhenya is customer-centric to her core, and I am deeply grateful for all of her hard work.

We are also looking at our geographic footprint. While it served us well for many years to cast a wide physical net, it's time to be more intentional about where we have employees on the ground. We are closing or consolidating around 45 office locations globally, including winding down Pier 70 in San Francisco and moving some of those colleagues to our new HQ in SF. And over the next 12 months we will begin the process of winding down our Singapore office and moving to a new APAC hub in a market where we operate our services.

Having learned my own personal lesson about the unpredictability of the world from the punch-in-the-gut called COVID-19, I will not make any claims with absolute certainty regarding our future. I will tell you, however, that we are making really, really hard choices now, so that we can say our goodbyes, have as much clarity as we can, move forward, and start to build again with confidence.

How we are helping departing employees

As we previewed last week, we have taken a lot of feedback and worked to provide strong severance benefits and other support for those leaving Uber, like healthcare coverage and an alumni talent directory. We're also taking care to support people in special situations a bit differently, like those on US visas or parental leaves. While the details will differ slightly by country, you can see a summary here [link removed]. Every departing employee will have a 1:1 to receive the details of their individual package.

If you are one of the many affected Uber teammates, I'll acknowledge right here that any package we offer, regardless of how thoughtful or generous, will never replace the opportunity to belong, to make a difference, to establish the kinds of bonds you establish with any important company or cause. We wouldn't be here without you. We will finish what you started, and we will be excited to see the great things that you will build next.

I am incredibly thankful to *everyone* reading this email, because the resilience and grit you've shown has made Uber the company it is and will continue to be. I've never had a harder day professionally than today, but Uber has consistently surprised me with the challenges it has thrown my way. But it's the toughest challenges that are worthwhile, and I know even more strongly in my heart than I ever have that Uber is worth it, and more.