Lyft has been struggling with one very important question: Can they make money?
On Wednesday, January 29, 2020, Lyft announced it is in the process of a corporate restructuring, which means job cuts.
Lyft employs over 5,500 people throughout the company and their various departments. The layoff will affect 90 people in the marketing and enterprise sales departments. The marketing department is being restructured. They currently market on a city to city basis. The restructuring will see the creation of marketing teams dedicated to regions instead of individual cities. The enterprise departments are reorganizing and reevaluating which markets are their top priorities going forward.
Though the company is letting 90 employees go in certain departments, they are still a growing company. Lyft plans on hiring up to 1,000 employees across several departments throughout 2020 to meet demands and grow in an efficient and profitable manner. 2020 has an increased need for the company to start making a profit, or at least, turn towards making a profit. The restructuring will help the company gear itself towards fulfilling its goals in a more efficient way.
Profits are at the heart of every company’s raison d’être. Lyft began as a highly acclaimed start up, and the profitability seemed endless. The reality has been less than promising. The company went public in March 2019 to a disappointing turn out. The company’s stock prices dropped below their offering price on day two, and they have never climbed back to the originating price. Currently, the prices sit at around 30% less than where they began. Lyft is not the only tech start up to have problems; Uber has had similar struggles. Unlike Uber, Lyft has not laid off any employees since their public opening. Uber laid off more than 1,000 employees after their IPO during several rounds of company cuts.
Currently, Lyft has yet to be profitable. The restructuring and job cuts should help the company attain their profit goals. If everything goes perfectly, they should turn a profit by the end of 2021. The goal is to see Lyft in the black by the beginning of 2023.