April 29 (UPI) — Ride-sharing service Lyft Inc. will reduce its workforce by 17 percent, the company said Tuesday, citing low demand caused by the COVID-19 pandemic.
The announcement came in a regulatory filing to the Securities and Exchange Commission, noting the “termination of approximately 982 employees, representing 17 percent of the company’s employees. The company estimates that it will incur approximately $28 million to $36 million of restructuring and related charges primarily related to employee severance and benefits costs.”
It added that Lyft “has furloughed approximately 288 employees,” and noted that company executives face short-term salary reductions. Its board of directors’ compensation will be reduced by 30 percent in the first quarter of 2020.
The San Francisco-based Lyft offers its ride-sharing service in 644 U.S. and 12 Canadian cities.
Its competitor, Uber, is considering a 20 percent reduction in its workforce, and in its own SEC filing on Tuesday, said that its chief technology officer, Thuan Pham, had resigned.
Both companies have attempted to diversify their services during the pandemic by delivering medical supplies to urban healthcare centers, but the decline in demand for ride-sharing comes as many potential customers stay home. Most drivers are part-time employees who are not eligible for paid leave or unemployment benefits.