Commentary

Citing Bloat, Uber Lays Off 1/3 Of Marketing Staff

Uber laid off about 400 members of its marketing team yesterday -- about a third of the worldwide staffers handling promotions, advertising and social media for the ride, food delivery and bicycle-sharing service.

In June, CEO Dara Khosrowshahi announced  that CMO Rebecca Messina was leaving the company after less than a year. At that time, Khosrowshahi combined the company’s marketing, communications and policy teams under Jill Hazelbaker, who previously ran communications and policy. 

In an email to Uber’s marketing staff yesterday, “Ms. Hazelbaker said the 400 layoffs were taking place because the team had grown bloated and decision-making was unclear. The marketing team’s organizational charts ran to more than 388 pages, she said,” reports Kate Conger, who broke the story for The New York Times.

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“Ms. Hazelbaker added that she planned to consolidate Uber’s regional marketing teams around the world, including in the United States and Canada, Latin America and the Middle East,” Conger continues.

“Hazelbaker said … that her conversations with people in and outside of Uber since then made clear ‘that Marketing as it is today is not set up for success.’ She cited unclear decision making, redundancies at the regional and country levels, and ‘deep dissatisfaction within the team,’ based on internal Uber surveys,” Alison Griswold writes  for Quartz.  

“A source familiar with the matter told Quartz that Uber employees are referring to the layoffs as the ‘marketing red wedding,’ a reference to a massacre that takes place in ‘Game of Thrones,’” she adds.

“The reorganized marketing team will be under the leadership of Mike Strickman, vice president of performance marketing, who joined from TripAdvisor a month ago, and another soon-to-be-hired head of global marketing. Strickman will oversee performance marketing, CRM and analytics, while the global marketing executive will manage the heads of product marketing, brand, Eats, B2B, research, planning and creative,” Kirsten Korosec reports for TechCrunch.

Quartz’ Griswold points out that “Uber has rarely cut employees in its 10-year history. The company laid off about 100 self-driving car operators -- the people who monitored its driverless cars during road tests -- in July 2018. Uber made those cuts as part of an overhaul of its driverless program after one of its cars struck and killed a woman in Tempe, Arizona.”

But for all the hype about it, Uber is far from turning a profit.

“Uber lost $1.01 billion in the first three months of this year, according to the company's first earnings report as a public company. Revenue from its core ridesharing business grew just 9% from the year prior. The company is set to report its second quarter earnings results next week,” Sara Ashley O’Brien reports for CNN Business.

“‘These changes are incredibly difficult to make because they have a huge impact on people’s lives,’ Mr. Khosrowshahi wrote in an email to Uber employees. ‘Many of our teams are too big, which creates overlapping work, makes for unclear decision owners and can lead to mediocre results. As a company, we can do more to keep the bar high, and expect more of ourselves and each other. So, put simply, we need to get our edge back,’” the NYT’s Conger writes.

“There's a general sense that while we've grown fast, we've slowed down," Khosrowshahi also said, O’Brien reports.

“Uber went public in May and currently trades just below the IPO price. The San Francisco-based company and its hometown rival, Lyft Inc., are under pressure from investors for heavy losses. Bloomberg also first reported on Monday that Lyft is parting ways with its chief operating officer, Jon McNeill, after less than two years on the job,” Bloomberg’s Eric Newcomer writes for Yahoo Finance

McNeill had been an executive at Tesla. His roles at Lyft will be distributed to other executives, Eliot Brown and Sarah Nassauer report  for The Wall Street Journal.

“The move by Lyft mirrors the decision of its larger rival last month to eliminate the operating chief role as it announced the departure of Barney Harford. Uber said at the time that Mr. Khosrowshahi wanted to take a more direct role in operations.

“The role of operating chief generally has been on the wane at large public companies. In 2018, 32% of 673 companies examined by search firm Crist|Kolder Associates had a COO, down from 48% in 2000,” Brown and Nassauer add.

Speaking of numbers, as Gizmodo’s Bryan Menegus does, “at the end of last year, 22,263 people worked at Uber. Around 5% of them used to work in marketing.

“Today, that number is closer to 3.6% (because of the layoffs).”

1 comment about "Citing Bloat, Uber Lays Off 1/3 Of Marketing Staff".
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  1. Ron Kurtz from American Affluence Research Center, July 30, 2019 at 11:49 a.m.

    Uber and Lyft have been Wall Street darlings because of their rapid revenue growth but perhaps the business model is flawed.  There are many ways to drive revenue growth if profit is not a requirement. There is a real question as to whether their business model can produce reasonable profits. 

    There are other high flyers (e.g. meal delivery services) where a similar situation may exist. 

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