Lyft Layoffs 2020: Why The Rideshare Company Is Laying Off 17% Of Its Workforce

Lyft (LYFT) is laying off a total of 982 employees and furloughing another 288 as it looks to cut costs because of the coronavirus pandemic.

The rideshare company announced the layoffs and furloughs on Wednesday in a Securities and Exchange Commission (SEC) filing. According to the regulatory filing, the layoffs account for 17% of Lyft’s total workforce.

In its SEC filing, Lyft said its decision to layoff and furlough employees was “in light of the ongoing economic challenges resulting from the COVID-19 pandemic and its impact on the Company’s business.”

Beyond the layoffs, Lyft will also cut salaries for its remaining employees for the next 12 weeks, starting in May. The company said it will reduce its executive leadership team’s pay by 30% and its vice president’s salary by 20%. All other employees will see their pay reduced by 10%. Lyft’s Board of Director’s compensation will also be cut by 30% for Q2 2020.

Lyft said it expects to take a $28 million to $36 million charge for the layoffs for employee severance and benefit costs for employees.

Lyft is not the only rideshare company that is looking to layoff workers as Uber is considering laying off about 20% of its staff, The Information reported. Rideshare companies have taken a hit during the coronavirus pandemic as consumers remain home during state stay-at-home orders to help prevent the spread of COVID-19.

Shares of Lyft stock were up 5.28% as of 1:01 p.m. EDT on Wednesday.