Friday, June 21, 2024
NewsRide Hailing newsTaxi industry news

Uber stock plummets to $23 with announcement of hiring freeze, expenditure reductions

Uber’s stock, which made news when it dipped below $40 per share in years past, is sitting at $23 per share on May 11, 2022. Photo: Yahoo Finance

Reuters’ new agency reported on May 9th that Uber Technologies Inc (UBER.N) will scale back hiring and reduce expenditure on its marketing and incentive activities. This report is based upon a letter from Chief Executive Officer Dara Khosrowshahi seen by Reuters.

This makes Uber the latest technology company to to rein in costs to have a lean investment model, after Facebook-owner Meta Platforms Inc (FB.O) said last week it would slow down the growth of its workforce. 

As detailed in Reuter’s report, Khosrowshahi said Uber’s change in strategy was a necessary response to the “seismic shift” in investor sentiment, CNBC first reported earlier Monday.

“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,” the report quoted Khosrowshahi as saying.

The company now plans to focus on achieving profitability on a free cash flow basis, rather than adjusted earnings before interest, taxes, depreciation, and amortization.

Uber shares have lost more than 43% since going public in 2019.

The company expects to generate “meaningful positive cash flows” for the full year, according to its latest earnings report.