Lyft will cut jobs “significantly” in the new CEO’s first major move

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(Reuters) – Lyft Inc. CEO David Risher said Friday that the ride-hailing service company will “significantly” cut jobs in another round of cost-cutting layoffs, which will lift its shares about 4%.

The company declined to provide details on the number of employees affected, but the Wall Street Journal reported earlier in the day that the move could affect 30% of Lyft’s workforce, or more than 4,000 employees.

The decision comes weeks after the newly appointed CEO said Lyft was not for sale, disappointing some investors who had predicted the exit of the company’s founders would pave the way for a deal and drive its stock last month.

A Wall Street Journal report said Lyft could see costs drop by half after layoffs. The company in November laid off about 683 employees, or 13% of its workforce at the time, to cut costs and deal with stiff competition from bigger rival Uber Technologies Inc in a tough economy. The two companies have been locked in a battle for market share from the lows of the pandemic, and investors worry that Lyft’s price cuts to avoid being second in the North American ride-sharing market will squeeze its earnings.

The companies’ most recent reported results show that Uber’s global presence and more diversified business gives it an edge over US-focused Lyft.

Lyft stock is down about 11% this year, compared to Uber’s price gain of 27.5%, as of Thursday’s close.

(Reporting by Akash Sriram and Aditya Soni in Bengaluru; Editing by Anil D’Silva and Chingini Ganguly)