According to a CNBC report Monday, Uber Technologies (NYSE:UBER) will scale back hiring and reduce expenditure on its marketing and incentive activities.
The ride-hailing company becomes the latest to rein over a hiring slow down and address the severe swing in economic sentiment while recession fears continue to be rife.
CEO Dara Khosrowshahi told employees in an email sent out late on Sunday,
"after earnings, I spent several days meeting investors in New York and Boston. It's clear that the market is experiencing a seismic shift, and we need to react accordingly."
Uber will now focus on achieving profitability on a free cash flow basis rather than adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) and treat hiring as a "privilege," Khosrowshahi said.
Last week, Uber said its driver base is at a post-pandemic high and expects this to continue without significant incentive investments, a sharp contrast to rival Lyft, which has said it needs to spend more on labor.
In the past couple of weeks, the tech sell-off of 2022 accelerated with first-quarter earnings highlighting challenges like inflation, supply chain shortages, and the war in Ukraine.
Though Uber revenues grew 136% year-over-year to $6.9 billion as demand for rides rebounded thanks to a relaxing in Covid restrictions, the loss per share of $3.04 was wider than analysts' expectations of $0.24.
The company said the decline was primarily due to aggregate unrealized losses, citing a slump in its equity investments.
Of Uber's quarterly losses of $5.9 billion, $5.6 billion came from its stakes in Southeast Asian mobility and delivery Grab (NASDAQ:GRAB), Chinese ride-hailing giant Didi (NYSE:DIDI), and autonomous vehicle company Aurora.
Following its Q1 results last Wednesday, Uber shares fell 5% as the ride-hailing giant flagged margin concerns and warned of global regulatory risks.
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