Last week, Uber announced its financial results for the first quarter (Q1) of 2022. Although its gross bookings were up 35% year-on-year to $26.4 million (including $13.9 billion for Uber Eats), and revenue was up 136% to $69 billion, the ride-hailing company reported a net loss of $5.6 billion.
Uber’s CEO Dara Khosrowshahi shared he was pleased with these results, especially that they “demonstrate just how much progress we’ve made navigating out of the pandemic and how the power of our platform is differentiating our business performance”.
But after meeting with investors post-results, Khosrowshahi announced some business changes to employees.
Uber’s change of direction also occurs in the context of tech stocks facing a sharp decline from highs during the COVID-19 pandemic. The tech-heavy NASDAQ composite index declined for the fight week in a row – this is the longest weekly losing streak since 2012.
What will change at Uber?
In a letter to employees, which has been obtained by CNBC, Khosrowshahi wrote: “After earnings, I spent several days meeting investors in New York and Boston. It’s clear that the market is experiencing a seismic shift and we need to react accordingly.
“Please bear in mind that while investors don’t run the company, they do own the company—and they’ve entrusted us with running it well. We get to set the strategy and make the decisions, but we need to do so in a way that ultimately serves our shareholders and their long-term interests.”
Uber’s CEO stated that if the company wants to continue to attract investment in the future: “We have to make sure our unit economics work before we go big.
As a result, “the least efficient marketing and incentive spend will be pulled back.
“We will treat hiring as a privilege and be deliberate about when and where we add headcount. We will be even more hardcore about costs across the board.”
Khosrowshahi continued: “In some places, we’ll have to pull back to sprint ahead. We will absolutely have to do more with less. This will not be easy, but it will be epic.
“Let’s write the next chapter of our story, working together as #OneUber, and let’s make it legendary.”
Uber’s moves echo similar ones made by Meta late last week. As part of its move to adjust its growth targets, Meta announced its hiring goals are going to change.
“We’re taking a more conservative approach to expense and headcount growth over the rest of the year,” noted Meta’s global head of recruiting, Miranda Kalinowski.
Only time will tell if other tech giants will follow suit.
If they do, this could have a huge impact on tech employees who are used to constantly moving between different companies for higher pay and better benefits.