Cab-hailing giant Uber has reportedly announced lay-offs across multiple teams, joining the elongating list of corporations getting flak for doing the same over the last few days. Around 23 percent staffers working in Uber’s human resources, recruitment, and workplace facilities teams will be affected by this round of firing, Bloomberg reported on Wednesday.
The development comes a week after Uber’s chief operating officer (COO), Andrew Macdonald recently expressed concerns around the expensive AI influx into the company culture. During a recent podcast, Macdonald said, Uber has already exhausted its entire budget that was kept aside for the year to enable its workforce use AI coding tools.
Let’s breakdown the lay-offs report
Uber, based in San Francisco, U.S., has reportedly planned a organizational
restructure to improve the internal connection and operational efficiency within its teams. Striving for a modernized update to its operations the company decided to trim its workforce, Bloomberg said.
Jill Hazelbaker, recently promoted as the company’s President, finalized these lay-offs — which, Uber claims, affects less than one percent of its global workforce of 34,000 employees.
In a memo circulated internally, Hazelbaker reportedly said that the layoffs are aimed at reducing complications and fragmentations among teams. She said that overlapping in responsibilities and unclear ownership of tasks were affecting smooth workflow which nudged the management to reduce headcount.
As per reports, Uber has not cited a pivot to AI as the reason behind these firings. However, it has taken other cost-cutting steps related to AI, that seem to align with the firings.
Last week, for instance, Uber levied limits on the use of AI tools for its employees. Dividing the availability of agentic assistance into different tiers, Uber has clarified budgets for AI use within the company. The base tier is priced $1,500 per month.
Earlier in March, Uber CEO Dara Khosrowshahi predicted that within the next decade, AI will replace humans in 70 to 80 percent of present day tasks. The 57-year-old Uber honcho has provided an AI training tool called Dara AI to help Uber employees practice presentations and other forms of corporate interactions.
Why job cuts are being linked to AI
In the last few weeks, a plethora of big corporates announced mass firings. These included Meta, Cloudfare, and Coinbase among other companies that collectively left thousands of skilled employees jobless over the last month alone.
As more and more companies race to adopt advance AI tools, their need to retain salaried employees is rapidly shedding. In a pivot towards AI-powered restructuring, companies have started to flatten their human teams and fatten their agentic support.
Outplacement firm Challenger, Gray & Christmas recently released a report that attributed AI as the leading reason for the ongoing corporate lay-offs this year. It claimed that the technology
“In April, AI led all reasons for job cuts for the second month in a row, with 21,490 announced during the month, 26 percent of total cuts,” the report said.
OpenAI CEO Sam Altman, however, does not see this period as an AI jobs apocalypse. In a recent conference, Altman said that as of now, there have been fewer white-collar losses than expected.
After Coinbase had announced a 14 percent team trim in May, Ripple CEO Brad Garlinghouse had said that AI should be used as a tool to elevate the performances of human employees — rather than being made primary performers within companies.
Boston Consultancy Group estimates that in the U.S. alone, upto 55 percent of jobs will be reshaped by AI over the next two to three years. Multiple research reports note that jobs like data entry, customer support, and bookkeeping would be eradicated by AI the fastest. The technology is also increasingly advancing in replacing coders and developers in companies like Coinbase.