Lyft layoff 13% of its employees, joining the growing list of Silicon Valley companies cutting their workforce to combat rising costs. The founds of Lyft notified both their employees and the public about the decision in a blog post on the company’s website. In addition to the job cuts, Lyft will sell their first-party vehicle service. However, the employees in that department will probably get new jobs with the purchasing company.
Why Lyft Layoff 13% Of Its Employees
Lyft’s founders, Logan Green and John Zimmer, gave the following reasons for the workforce reduction:
- The company believes there’s a recession coming next year
- Rideshare insurance is going up
- The various moves the company made to reduce expenses didn’t work (like freezing hiring and stop investing in less-critical goals)
- Lyft needs to become leaner to stay afloat
The Lyft layoff affects every department in the company. The company chose to cut employees depending if they worked in a “deprioritized” department. Those in management weren’t safe as Lyft reduced those too to simply their management organization. Finally, they let go employees depending on their job productivity numbers.
How Lyft Will Aid The Cut Employees
The company is give the cut employees a nice severance package containing:
- 10 weeks pay
- Healthcare coverage through April 30, 2023
- Accelerated equity vesting for the November 20 vesting date
- Recruiting assistance
- Team members with 4+ years with Lyft will receive an additional four weeks of pay
This is a nice severance package because former employees don’t have to pay for health insurance for six months. And that’s quite the savings because COBRA is expensive. In addition, the company is going to pay out equity due to vest later this month. Lyft didn’t have to do that and could’ve save that money. Finally, the company will help their former employee prepare to find another job by giving them resume assistance and interview practice classes.