Lyft assured that no layoffs were coming. Now employees are scrambling for their next gig. – techcrunch

The day before Lyft shut down its in-house rental service and laid off about 60 employees, the team in charge of the program had what it thought was a major problem.

Throughout June, the rental team had attempted to get the service up and running in New York without success. The launch was delayed repeatedly and for various reasons, including the need to get a new insurance provider in the state. But even after the introduction of new insurance policy from July 1 According to sources who spoke with Meczyki.Net on condition of anonymity, Lyft still hasn’t opened its rental business in New York, leaving the team in question.

Leadership eventually told the team that it was considering New York altogether and would instead move operations to open an in-house rental program in Austin where there are fewer regulatory hurdles.

Within three weeks, Lyft executives will shut down the entire rental program, leaving workers scrambling to find other positions within the company or risk losing their employment status altogether. Lyft also announced that about 60 employees would be laid off.

The layoff announcements came just ahead of Lyft’s second-quarter earnings release, which will be released on Thursday. The earnings call could provide more clarity on the company’s direction and expectation of further cuts.

july surprise

During a failed attempt to launch in New York, alarm bells sounded for at least one employee, who spoke to Meczyki.Net on condition of anonymity. Employees, seeking peace of mind, held on to comments from Lyft co-founder and president John Zimmer during a company-wide meeting in May, when he Talked about re-prioritization, slow recruitment and budget cuts and assured everyone that retrenchment was not being considered,

What happened next surprised many employees. Employees received an email on July 19 from Cal Lancton, VP of Fleet and Global Operations — which has been spotted by Meczyki.Net — informing them that Lyft has finished its revaluation following the first-quarter earnings call and its in-house Decided to discontinue the rental program and continue. offer a similar service through their partnerships with Hertz and Sixt.

The email also said that Lyft will consolidate certain areas in global operations and centralize its market operations team — primarily on-ground operations such as driver assistance and vehicle service centers. Lancton said two locations — the San Francisco Vehicle Service Center and the Detroit Hub — would be closed.

“We have worked hard to keep as many team members as possible in other roles in the business,” Lancton wrote in an email to employees. “However, there will be no role for everyone in this new structure. Following this message, Lyft Rentals will help central teams and affected team members in Global Operations to learn what this means for their roles.” A calendar invitation will be received for 10:45 a.m. PST.

Most of the 60 affected employees were traced through memos. Meanwhile, hourly workers working at local service centers learned that when they came to work and were asked to go home, according to a source.

Ten minutes after salaried employees received the initial memo, they received a follow-up email from Henry Imber, head of Lyft Rentals, explaining what the wind down process would look like and inviting the team to a video conference call.

Shocked and unsettled, the team joined the call and were told they would have 30 days to find a new role within Lyft or split. HR said they would offer recruiting assistance, but did not provide any details about what it would look like until they received pushback from employees.

Team members wanted to know if they would be placed in new roles or at least, preferential, speedy treatment. HR said the fired employees will not be placed in new roles, but their resumes will reach the recruiter’s desk.

The laid-off employees were offered 10 weeks of severance pay, which would be a one-time payment issued on August 19, their last day of work.

Lyft did not respond to a request for comment. Meczyki.Net will update the article if the company does.

What’s next for Lyft?

Since news of the layoffs, Lyft has helped the team with resumes, interview submission and LinkedIn consulting, as well as quick interviews for positions within the company. But the frustration is high for employees who think they should just be placed in new roles rather than competing with outsiders.

“The mood is very sour,” said one Lyft employee. “It’s very serious, but everyone has been professional.”

According to Lyft’s job page, the ride-hail company is most prominently in hiring departments in marketing, operations, and product.

It’s unclear where the freed up resources will now be directed, but they will likely go back to Lyft’s core ride-sharing business. Over time periods, companies often feel galvanized to start new, perhaps riskier, business lines. But when business or the economy, or both, fail, it is common to see the same companies return to their original mission. lift Started our rental business in December 2019After Uber shut down a similar venture and just before the pandemic hit the world, and Lyft’s balance sheet, that still hasn’t fully recovered.

A Lyft employee who spoke to Meczyki.Net said the company’s first-quarter earnings call “sets the pace of this utterly panicky, reactionary decision-making.”

In Q1 2022, Lyft posted strong gains in terms of active ridership and revenue per rider compared to the first COVID wave, but the company reported a significant decline in per-rider revenue compared to Q4 2021 levels, as well as a significant drop in active ridership. a gradual decline in the second quarter.

Investors were scared of the unclear path of growth in the near future. The company’s shares fell more than 12% in later trading that day, and only continued to decline.

At the time of this writing, Lyft shares are trading at $16.71, down from $21.56 on May 4, when Lyft reported Q1 earnings. Weak stock performance also affected employees who were given a stake in the company as part of their compensation. They were given a special equity grant as the stock declined, but it doesn’t do much if the company’s stock continues to decline.