
Uber discusses plan to lay off about 20% of employees - ceohockey60
https://www.theinformation.com/articles/uber-discusses-plan-to-lay-off-about-20-of-employees?&pu=hackernews0hocd3&utm_source=hackernews&utm_medium=unlock
======
ggm
Uber is a net destructive play. Yes, taxi was a broken model but what uber did
is suck social capital out of taxi, put driver against driver, rent seeking
and import money to America from the world.

A plague on uber and Airbnb. May they both rot.

Btw this is not just troll bait this is my honest opinion. I talk to taxi
drivers and use taxi and these people got predated on for a thin profit
outcome.

~~~
murukesh_s
>A plague on uber and Airbnb. May they both rot.

Don't agree with that. It is a new model which have advantages and
disadvantages. You would know if you are a foreigner in a remote town and want
to get a Taxi. If the model is bad the market will correct it eventually. I
think what's bad is the VC's funding or persuading founders to continue to run
with loss making business models for cornering the market. These companies
then pump huge marketing money without a profitability in near future. That
destroys the local competition if any and skew the market towards them for a
while. Sometimes it will work out but many times it would fail. Again time
will correct the practice if it's not sustainable, we have to wait.

Also Airbnb and Uber have enabled lot of people earn livelihood without having
to wait for trade union approvals for sharing taxi stands or getting hotel
licences. If the model is sustainable it will go back to old models, but i
feel it's gonna stay whether through Uber or other service(s).

>import money to America from the world

What about CocaCola, Pepsi, Amazon (and AWS) Google, Microsoft, Facebook, Nike
and hundreds of other brands ?

~~~
oblio
> If the model is bad the market will correct it eventually.

The "model" of selling leaded gasoline took 90 years to correct. I'd venture
to say that the market correcting itself after a lifetime is not what most
people want.

Not that I care in this case, just pointing out a flaw in this logic.

~~~
TeMPOraL
It took that many years to collect enough research and attention on the topic,
and then force the industry's hand by regulatory measures, and it only worked
because when the lead phaseout started, there already were alternatives
developed. Without all that, the market wouldn't self-correct at all.

I mean, it's such a common failure mode of free markets, it should IMO be
taught to kids in schools. If a product/service has damaging side effects that
aren't immediately apparent, or the damage is diffuse, or takes a long time to
manifest, then the market is blind to those costs. A product that mitigates
these side effects is usually more expensive. Such a safer alternative isn't
competitive on the market and won't succeed until it becomes as cheap as the
less safe one (or cheaper than it).

Conclusion being: don't expect the market to correct against profits on its
own. In fact, it will resist correction, so for the change to happen, you need
strong regulatory pressure and/or innovation aimed at making the correction
more profitable. In reality, you need both.

~~~
mikestew
Not quite, it was known to be a bad idea at the time, and there were
alternatives available. So...why? Because market control, patents, and the
usual cast of idiots having nothing to do with "doing the right thing":

[https://www.smithsonianmag.com/smart-news/leaded-gas-
poison-...](https://www.smithsonianmag.com/smart-news/leaded-gas-poison-
invented-180961368/)

------
nitwit005
This feels like an odd question to ask, but are they losing money faster or
slower now? They were previously spending billions in marketing costs, and it
sounded like at least some rides were a net loss.

~~~
djannzjkzxn
People would say things like “losing money on every ride” but this didn’t
appear to be correct based on the released financials. It was more like
“making some money on rides overall, but spending tons of money on overhead”.
Losing ride volume only makes that situation worse.

~~~
lmilcin
By your definition many successful companies would be performing poorly as
they immediately invest all their profits.

Marketing is an investment, because the benefits of marketing are in the
future and are aimed at increasing business.

~~~
sfifs
You're getting downvoted but GAAP treatment aside it's actually an interesting
business question.

It's often useful to think of marketing expenses on a continuum between "upper
funnel" and "lower funnel". "Upper funnel" expenses tend to be more like
investments (Brand TV advertising).Lower funnel tend to be more like "cost of
sales" (promotion to buy more).

Marketing spends on direct user acquisition tends to fall somewhere in the
middle and that's where the whole controversy lies. One could argue as many
start-ups have done that only if you acquire users aggressively will your
future growth come and hence the spend is more "investment like".

One could also argue that consumers are disloyal and will take their business
to whatever "good enough" competitor exists that offers better value.

A few decades of academic research in buyer behavior suggests that the latter
is the norm in consumer facing industries (soaps, corn flakes, hotels, air
tickets...). Purchase behavior in these industries tend to follow very well
defined patterns (NBD-Dirichlet) but of course network effects, patents and
regulatory capture can up-end this (Google, Facebook Comcast, eInk Corp...)

In many ways, the marketing models of Uber and similar startups are bets that
network effects break the patterns.

~~~
lmilcin
I think "fake it till you make it" is a proven, successful marketing strategy
aimed at bringing actual business later on.

When investors bring money they don't necessarily need to have profits
immediately, it is ok to risk some of it for promise of future benefits (that
is very definition of investing).

I understand subsidizing rides might be questionable way of doing this, but do
not mistake it for invalid business model.

Employing children from poor asian countries to produce clothes you are
selling is questionable but it sure as hell is profitable unless we
collectively decide to make it unprofitable by outlawing or penalizing it in
some other way.

In the end, if we think rides should not be subsidized or maybe drivers should
be paid enough to have a living there is nothing stopping us from electing
reputable representatives that can be trusted to do just that.

------
dang
I've asked The Information to unlock this article for HN readers (see
[https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...](https://hn.algolia.com/?dateRange=all&page=0&prefix=true&query=by%3Adang%20%20%22the%20information%22%20%20unlock&sort=byDate&type=comment))
but in the meantime the hard paywall means we have to bury it.

Edit: done now. Thanks!

~~~
mnkc
Will be keeping an eye out for it, thanks!

------
MattGaiser
There is an older Hacker News comment by an Uber employee about how they built
and maintained their own chat app. I suspect they realized that not everything
need be custom.

[https://news.ycombinator.com/item?id=20931644](https://news.ycombinator.com/item?id=20931644)

~~~
notatoad
and then in the replies to that comment, it's revealed that they actually did
not build and maintain their own chat app, they just had a custom-branded
release of mattermost.

probably not the best example of not-invented-here syndrome.

~~~
carbonatedmilk
Yeah, except they _did_ rewrite the entire Mattermost mobile clients in React
Native (And contributed it back, too -
[https://eng.uber.com/uchat/](https://eng.uber.com/uchat/)) Look, I'm all for
Uber firing some of their 27,000 employees (27,000 seems like the wrong
number), but their engineering team make a tonne of cool stuff and are really
good open source citizens. H3 Geospatial indexing, Kepler.gl, and yes the
Mattermost react native client - I use them all every day. Maybe let's trim in
the HR and marketing departments, instead?

~~~
brutusborn
How many of these contributions have became part of Uber's core business? I
agree that their open source contributions are laudable, but it seems unfair
to expect them to bankroll projects that don't contribute to the bottom line,
especially if they are bleeding cash. It would be different if they were
rolling in cash like the faang companies.

~~~
pm90
This is an interesting conundrum: Uber needs to splurge to be the kind of
company that attracts fang talent but their revenue is still not at Faang
level just yet.

------
siquick
How are the 3800 engineers divided up at a company like this? I know it's easy
to say "why on earth are there 3800 devs, what are they doing all day?" but
that does seem like a substantial amount.

~~~
beart
Yes I wonder the same thing - I think about Apple and how many engineers they
have which also seems crazy for their "output" in terms of product variations.
Uber is on a whole nother level, at least from the perspective of the average
consumer.

~~~
dgellow
Not everybody works on customer facing products. Apple has a ton of software
to manage their supply chain and other logistical things, which requires a lot
of engineering effort. That’s what happen when you try to control every part
of your product development.

~~~
shuckles
That engineering work is largely contracted out through IS&T. Apple’s product
engineering org is famously lean.

------
aazaa
> Layoffs of that magnitude, which haven’t been finalized but could be
> announced in stages in the coming weeks, could result in more than 5,400 of
> Uber’s 27,000 employees losing their jobs. ...

That figure of 27K total employees is surprisingly high, given that AFAIK, it
doesn't include actual drivers. I'd be interested in knowing how these jobs
break down by task.

~~~
jonknee
They're a global company that operates in 900 cities. I don't understand why
so many people on this site seem to think it should be a few programmers and
some suits to sign the checks.

~~~
Barrin92
because for the past 11 years, and people tend to forget how long this company
has existed, they have been burning through money faster than star athletes
after retirement while inventing increasingly convoluted metrics to claim to
be actually profitable.

Many people are just tired of seeing glorified sales and taxi companies
disguising themselves as tech companies.

The defining feature of a technology firm is reduction of marginal costs at
scale. If you're adding human labour with every city you expand into you might
have a problem on your hands if your banking on making facebook margins.There
is an underlying exhaustion among some people, myself included, who want to
see investments into basic research and real technological advances rather
than yet another app delivering pizza being valuated at 50 billion dollars.

~~~
randomsearch
(Serious questions, seeking clarity in my own mind)

Is Netflix a tech company?

Is a company that sells ebooks a tech company? What about scientific journals?
Are they tech companies?

Is Instagram a tech company? What about ad brokers?

~~~
dredmorbius
I'd suggest the OECD definition:

Hatzichronoglou, Thomas: "Revision of the High-Technology Sector and Product
Classification", OECD Science, Technology and Industry Working Papers, No.
1997/02, OECD Publishing, Paris.

[https://read.oecd-ilibrary.org/science-and-
technology/revisi...](https://read.oecd-ilibrary.org/science-and-
technology/revision-of-the-high-technology-sector-and-product-
classification_134337307632)

Page 7 specifically divides _manufacturing_ industries (it doesn't address
services) into four technology levels, high, medium-high, medium low, and low:

High technology: Aerospace, computers, office machinery, electronics-
communications, pharmaceuticals.

Medium-high technology: Scientific instruments, motor vehicles, electrical
machinery, chemicals, other transport equipment, non-electrical machinery.

Medium-low technoogy: Rubber and plastic products, shipbuilding, other
manufacturing, non-ferrous metals, non-metallic mineral products, fabricated
metal products, petroleum refining, ferrous metals.

Low-technology: Paper printing, textiles and clothing, food, beverages, and
tabacco, wood and furniture.

Given J.S. Mill's wonderful definition of technology, 'the study of effects",
there's little in human activity which is completely atechnological. There
remains, however, much that is quite some remove from the cutting edge.

([http://www.gutenberg.org/files/12004/12004-h/12004-h.htm#FNa...](http://www.gutenberg.org/files/12004/12004-h/12004-h.htm#FNanchor11))

In the technology adoption lifecycle, high tech are innovators. An early-
adopter firm is itself still not high tech itself.

(Previously:
[https://news.ycombinator.com/item?id=22884971](https://news.ycombinator.com/item?id=22884971))

------
eagsalazar2
They aren't profitable anyway - is this really in reaction to decreased
revenue or is it a culling and reorg, timed and justified opportunistically to
avoid bad PR and publicity?

~~~
deminature
Rides is bordering on profitability as of Nov last year:
[https://arstechnica.com/cars/2019/11/uber-
lost-1-1-billion-l...](https://arstechnica.com/cars/2019/11/uber-
lost-1-1-billion-last-quarter-says-rides-are-profitable-sort-of/)

Were the virus not to occur, the company was planning to be legitimately
profitable by end 2020: [https://www.reuters.com/article/us-uber-results/uber-
sees-pr...](https://www.reuters.com/article/us-uber-results/uber-sees-profit-
by-end-of-2020-but-still-expects-full-year-loss-idUSKBN2002UQ)

~~~
jahn716
Something about "planning to be legitimately profitable by end of 2020" makes
me chuckle. Like most founders probably plan this for their businesses haha

~~~
dotBen
"planning to be profitable" in this situation means that the financials are
losing less money each month and at an identifiable point in time breakeven
and beyond will occur.

It doesn't mean "at some point I intend to change some things and hope it
makes the business profitable" in the same way "I plan on getting a haircut".

~~~
arcticbull
To be fair I was planning on getting a haircut before the world shut down a
few months ago. Things aren't looking great up there haha. Now, I plan on
getting a haircut in the same way a startup founder plans on achieving
profitability: ideally, at some point, before it falls out.

~~~
rightbyte
So, they are going to do a haircut after summer or ask their mom to do it now?

~~~
arcticbull
A "ramen profitable" haircut if you will.

------
JMTQp8lwXL
Uber is down 27% from its IPO. Not as bad as one may assume, given the hard
data coming from its filings and, of course, the news coverage. Lyft is down
58%.

At the troughs, Uber was down 48% and Lyft 72%.

This moment --the layoffs and departure-- feels like a capitulation of the
private equity valuations. We shouldn't feel good about people losing. But
many have been shouting about how insane the blitzscale model is. Maybe it
achieves it purposes for early investors -- that peak moment of IPO
liquidation. But it certainly is no good for the employees and their morale
for carrying on.

~~~
texasbigdata
Measuring equity cap with different levels of scale and capital structures
across companies is not always insightful

------
product50
Bunch of random engineers in this thread talking about business when they have
no clue how companies are run.

Yes- Uber was making loss before. But their ridership was growing and they
were giving incentives on the supply side (drivers) to bring more players in.
Thus it made sense to continue investing in headcount to grow. Now, though,
everything is disrupted. It doesn't matter that they are losing money slower -
if the outlook of the business is weak then they cut costs and reduce
headcount.

~~~
rlanday
“Lose money on every sale but make it up on volume” is not a sustainable
business model.

~~~
product50
Oh please. Once you have very high volume and strong market share you can
gradually increase prices to improve profitability.

~~~
rlanday
How much higher can Uber’s volume get? They will probably never exceed the
volume they were seeing a few months ago and they still managed to lose $8.5
billion last year. How in the world do you increase prices by that much
without losing most of your customers? Unfortunately in the age of
coronavirus, the irrational exuberance is gone now.

------
xbeta
It's bound to happen when the business is at a complete halt for a few months.
:-(

~~~
United857
There's still Uber Eats -- I'd expect that's grown significantly which would
help soften the blow.

~~~
_jal
I've stopped using delivery apps, and am calling my local restaurants
directly. Some have, um, less formal delivery options, and I fall back to just
walking over.

In my estimation, my local restaurants need that 30+% more than public
companies.

~~~
sfj
You're wasting gas, though, and hurting the environment.

~~~
atq2119
This is an incredibly US-biased comment, plus the comment you responded to
even spelled out explicitly that they _walk_ to their local restaurants...

~~~
sfj
> Some have, um, less formal delivery options, and I fall back to just walking
> over.

He only walks to _some_ , not all. And I don't live in the US, so if it's
incredibly US biased, I just got lucky, I guess.

~~~
detaro
Yes, to those that don't have delivery options. What makes delivery organized
by the restaurant more wasteful than the delivery by someone working for a
gig-economy app?

~~~
sfj
Because the restaurant can't combine its orders with those of its competitors
in one run. Economies of scale.

------
overfitted
As an interesting side note it was also in the article's last paragraph about
Uber not using Public Clouds such as AWS. Is that becoming more common or
less? Is there any other examples of enterprises seeing benefits of running
their own services?

Referring to this part: _...they chose to largely manage their own online
servers. While that led to some rocky moments early on, people who have worked
at the company have said Uber was able to save substantially on costs._

~~~
pm90
As a sibling mentioned, cheaper long term costs are a huge factor. Dropbox is
another public example of a company that has transitioned away from the cloud
[0]. Twitter famously still uses a data center for their big data processing.
[1]

0: [https://builtin.com/hardware/dropbox-magic-pocket-
distribute...](https://builtin.com/hardware/dropbox-magic-pocket-distributed-
storage-system)

1: [https://cloud.google.com/twitter](https://cloud.google.com/twitter)

------
mushbino
Lyft is about to layoff roughly 30% tomorrow. That's the rumor anyway.

~~~
murphy214
from who?

~~~
mushbino
Oh, it looks like 17%. 1000 employees got laid off +300 furloughed. They are
giving severance through mid July and they’re giving Modern Health mental
health coverage through end of December.

Plus a 10% pay cut across the board.

~~~
vvladymyrov
So is it full health coverage through end of Decemeber or only mental health
coverage through the end of December? Anyway - sounds like decent severance by
US standards.

~~~
mushbino
Full health coverage, I believe. It's about as good a severance as you're
gonna get in the US.

------
finkin1
The amount of corporate debt could be a real problem in the coming months. I'm
curious to see how all of these economic recovery programs end up working when
we look back in a year.

~~~
nemonemo
I'm not well versed in the economics, so could you elaborate how the corporate
debt would be a problem in this economy? Wouldn't the lowered rates & other
activities by Fed be helpful for the entities with massive debt?

~~~
arawde
When a downturn like this happens, the Federal Reserve lowers rates to
encourage spending. But at the same time, people are less likely to hold
corporate debt and instead hold cash. People are less likely to hold corporate
debt because the corporation has less revenue to service its debt. In the case
of a (highly) public company which doesn't have profits, if Uber were to try
to sell bonds, the spread over, say, treasuries, would probably be above
8-10%.

In other words, corporate debt isn't priced according to lowered rates. It's
priced according to what bond investors would need to be paid in order to
adequately compensate for the risk of Uber going bankrupt.

The only way the Fed would help would be if the Fed bought Uber's bonds, but
that would require Uber to be investment grade, which would be laughable, or a
"fallen angel", a company which was investment grade before the crisis but has
since been downgraded.

~~~
chrisco255
The Fed is buying junk bonds right now:
[https://www.bloomberg.com/news/articles/2020-04-09/fed-
unlea...](https://www.bloomberg.com/news/articles/2020-04-09/fed-unleashes-
fresh-steps-for-as-much-as-2-3-trillion-in-aid)

This underscores the desperate maneuvers the Fed is undertaking to avoid the
inevitable. They've killed the free market to save zombies like Uber, which
are unprofitable.

~~~
arawde
From the article (emphasis added)

> The Fed said Thursday it will invest up to $2.3 trillion in loans to aid
> small and mid-sized businesses and state and local governments as well as
> fund the purchases of __some types of high-yield bonds __, collateralized
> loan obligations and commercial mortgage-backed securities.

The qualifier is the fallen angels clause which I mentioned. The way this
works is that the Fed buys investment-grade ETFs. The underlying indices for
those funds still have companies which have been downgraded to junk, which are
the falled angels. The Fed isn't going out and purchasing bonds directly in
the bond market, they're using existing infrastructure to perform market
operations.

~~~
JMTQp8lwXL
If an ETF is composed of junk-grade bond debt, should the ETF also be
considered junk-grade? How can the ETF remain "investment grade"?

~~~
trhway
last time the Wall St wizards were able to do that with the junk mortgage
bonds. Slice and dice. Junk in, triple-A out. And as far as i see the wizards
are still there.

------
eBombzor
As if the job market wasn't difficult enough... now about 5,400 highly
qualified and experienced developers are looking for the same positions as I
am... What do I even do now...

~~~
edouard-harris
Most of the laid-off positions, assuming these layoffs do take place, probably
won't be developers. During temporary crises, companies prefer to lay off the
workers whose positions will be easiest to hire back after the crisis has
ended. Engineering positions tend to be hard to hire for, so engineers are
usually hit less hard by these types of layoffs than other roles.

But your mileage may vary: companies also understand that one big cut is
better for morale than lots of small ones. The current crisis is temporary but
might last a long time, so a company that thinks they might have to fire
engineers _eventually_ , could plausibly pull forward that decision in an
attempt to save the business.

Times are hard all around.

~~~
vvladymyrov
Historically Uber was using "death by thousand cuts" strategy - layoff a
little below 500 employees at a time, probably because of WARN act.

------
tanilama
The unblocked version says 800 out of 3800 engineers will be slashed. That is
pretty uniform and brutal TBH.

------
yalogin
Genuine questions here - Why does Uber have 27000 employees? What do they with
that many people?

~~~
xxs
Most of it it'd be local operations, support. Lots of compliance and local
marketing. They operate "in more than 900 cities"[0]. For example many cities
would require drivers to be licensed to drive - that would require local
support.

The company is very far from dev. centric in that regard, just because they
have headquarters in San Francisco. Likely they overhired development, HR and
the like, of course.

[0]:
[https://www.uber.com/global/en/cities/](https://www.uber.com/global/en/cities/)

~~~
9nGQluzmnq3M
Uber's S-1 (quoted below) claims 5,400 direct employees in platform support
alone. Interestingly, I've seen an Uber floor while touring a third-party call
center in Manila, so they probably outsource even more these days.

 _Platform User Support_

 _We have invested in a network of global support centers to support our
worldwide operations. We have ten primary support centers in Chicago (U.S.),
Phoenix (U.S.), Limerick (Ireland), Krakow (Poland), San Jose (Costa Rica),
Hyderabad (India), São Paulo (Brazil), Manila (the Philippines), Lisbon
(Portugal), and Cairo (Egypt) with approximately 5,400 employees and 400
independent contractors who provide 24 /7 support for platform users in the
United States and in certain other countries. In addition to in-app, web, and
phone support, Drivers can visit Uber Greenlight Hub locations for in-person
support._

[https://www.sec.gov/Archives/edgar/data/1543151/000119312519...](https://www.sec.gov/Archives/edgar/data/1543151/000119312519103850/d647752ds1.htm)

------
diogenescynic
More layoffs are coming. I know PayPal is going to shift a bunch of jobs from
San Jose to Austin when this is all up. There will be way more layoffs or
relocations.

~~~
kaesar14
Do you have a source, or just rumors?

~~~
diogenescynic
I’m being let go and it’s super obvious. They hired our replacements in Austin
in March and they started in April. But now management is playing games hiding
them under other org trees, etc. They did the same thing last year. There was
obviously going to be a lay-off at the end of March like last year, but they
delayed it to not look bad PR-wise. My manager has even casually started
making strange comments like “all the jobs will eventually be in Austin” and
“sometimes you just have to get laid off” so it’s like they’re telegraphing it
at this point.

~~~
dclusin
If you think your team is going to get laid off you could maybe try to
volunteer for it and negotiate for a more generous severance package. Big cos
like that typically set aside money for those things and how it gets
distributed is discretionary.

~~~
diogenescynic
I may actually do this tomorrow. Thanks for the idea. Didn’t realize it was an
option. The worst part is just waiting for it to happen.

~~~
dclusin
That's what I would do in that situation. I worked for a bank back in 2008.
Just sat around waiting for the inevitable. Your boss could be a dick and lay
you off on the spot and it may blow up in your face. But you might also be
able to get more than what might have been coming your way. I'd give it a
shot. It sounds like you have already caught wind, so jockeying for position
is probably a safe bet.

------
uptown
March 19th: "Uber shares soar after CEO says enough cash to ride out
coronavirus crisis"

[https://www.reuters.com/article/us-health-coronavirus-
uber/u...](https://www.reuters.com/article/us-health-coronavirus-uber/uber-
shares-soar-after-ceo-says-enough-cash-to-ride-out-coronavirus-crisis-
idUSKBN2162MN)

April 21: "Uber Bookings Now Down 80%"

[https://news.ycombinator.com/item?id=22938687](https://news.ycombinator.com/item?id=22938687)

April 28: Uber lays off 5400, CTO resigns

[edit] - Fixed the dates. I've lost all track of time.

~~~
mangoman
those last two happened in April not March. I still think it's pretty stark to
go from 'we are flush with cash' to '5400 laid off' in one month, but let's
not push the idea that they fell off in one week.

~~~
hinkley
We are not an industry that is particularly strong on the capacity planning
front.

I don't know where that stems from, but we are constantly surprised when we
have too much or not nearly enough of whatever we need, and we don't know what
the right amount is until after it has already happened.

~~~
three_seagrass
Margins drive efficiencies. A grocery store is amazing at holiday planning but
a tech company will make guesstimates.

------
kungato
I wouldn't be surprised if they laid off 90%. They have the app and infra
probably finished and stable, established brand, they tried all the markets
they could, lawsuits should be over by now. They should just lay off, reduce
fees and use the brand for market share

~~~
hammeiam
Would you be surprised if AirBnb laid off 90%? Or Google? Or Amazon? It's
already built, right, so why do they need so many people just to keep the
lights on?

~~~
bewareandaware
Probably just keeping the lights on won't cut it when a competitor arises, and
by then they would have run a opportunity loss.

------
michaelyoshika
On one hand, I don't understand why they need so many employees for a ride-
sharing platform. On the other hand, I can understand that people are just so
eager to find another growth point so anything looking like a growth point
could get almost unlimited capitals then hire a lot.

~~~
thelean12
This is a common trope on HN that's strange to me.

I feel like people are unable to see the complexity of an organization from
the outside, but normally accept the complexity and need for employees while
on the inside.

~~~
cwzwarich
Sometimes an organization is complex because it has a lot of employees, rather
than needing a lot of employees because it's inherently complex. You see the
same thing with large software projects.

~~~
thelean12
Sure, there's always going to be bloat, but complexity at scale isn't just
because there are a lot of employees.

Twitter is a great example. I bet they have 20+ people working on a specific
anti-abuse system. Another 20+ working on a specific ad type that makes the
company money. Another team that just works on account security. Another team
that works on internal tooling. Or the shared UI components team. Etc until
you get the current state of Twitter.

All of those teams don't need to exist when Twitter is small, but do when they
scale.

~~~
samcal
We can definitely agree that as a company grows, it needs more employees. I
think the point at issue is that there is such thing as having _too many_
employees. There are multiple opposing forces in tension here, and the tricky
part is striking the right balance. I think that GP was trying to say that
they hired too many people, and introduced complexity.

~~~
thelean12
A layoff is certainly a sign that they hired too much, I agree.

I was going off what I figured the poster was getting at: they don't
understand how Uber has even 80% of their employees.

~~~
samcal
Is that what they were getting at? It seems to me like you made up that 80%
number just now, to prove your point.

~~~
thelean12
I think you forgot what thread you're in.

Uber is discussing laying off 20% of employees. 100 - 20 = 80.

It's completely reasonable to assume the OP was trying to figure out how they
have so many employees, even after the layoffs.

------
3fe9a03ccd14ca5
If layoffs are the only downside we have to massive unemployment, then I will
consider us very lucky.

Another scenario that commonly follows periods of high unemployment is severe
political unrest. That’s the kind of fertile environment that has historically
preceded some very bad things. I hope the shutdown is worth it.

~~~
taywrobel
The president just suggested that people inject disinfectants and then lied
about it being sarcasm the very next day. Even if that were true, what kind of
world leader thinks it’s a good idea to be sarcastic during a global pandemic
to troll the media?

Maybe it’s time for severe political unrest.

~~~
hackermang
He didn’t actually suggest that. Why are you being dishonest?

~~~
taywrobel
Here’s the full, direct quote. Please let me know where the dishonesty is:

"And then I see the disinfectant where it knocks it out in a minute. One
minute. And is there a way we can do something like that by injection inside
or, or almost a cleaning? Because you see it gets on the lungs and it does a
tremendous number, so it will be interesting to check that. So that you're
going to have to use medical doctors.”

Your only possible argument for him not suggesting the injection of
disinfectants is that it’s barely a coherent thought, like most of his
brainless dribble.

But if your defense for stupid statements is that the president of the United
States is illiterate, you need to take a hard look in the mirror.

------
Lukesys
Since when is this news? Has their ever been a time when Uber hasn't wanted to
lay off a large proportion of their 'staff'?

------
jedberg
Didn't they just do a 20% layoff last September?

~~~
joeblau
The article says 435 in Sept which was 8%.

~~~
lainga
8% of what? All employees, or engineering? (435/0.08) ~= 5400, and Uber's S-1
filing says they had 22,263 employees as of 31-12-2018.

[https://www.sec.gov/Archives/edgar/data/1543151/000119312519...](https://www.sec.gov/Archives/edgar/data/1543151/000119312519103850/d647752ds1.htm)

(ed. - article says 27,000... but Uber's had three low-hundreds firings chunks
tallying ~1260 total over last summer, and said they were freezing engineering
hires. Were the extra 8k hired in the first half of 2019?)

~~~
artursapek
22,000 employees _not counting drivers_? Holy crap.

------
alexbanks
Companies that are not profitable and have existed largely on hype/VC hype
will continue to get crushed by their previous-years' bloat.

Companies that depend on people being out and about will get crushed by the
coronavirus.

Uber is both.

~~~
dehrmann
I think Uber had a pretty clear path to profitability prior to this. The only
open question was could they raise prices enough to not drive customers away
and not be undercut by Lyft. Lyft is in the same boat, so it would probably be
like when airlines started charging for checked bags--once one does it, they
all do. As for the demand curve? I think they could make it work. Like Wework,
what Uber does is a real business. It just got over-hyped.

~~~
def8cefe
Lyft isn't their only competition. If they (Uber or Lyft) raise prices they
will lose out on a lot of their appeal over traditional taxis. Cost relative
to taxis is the main reason Uber and Lyft were successful in the first place.

Many taxi dispatches have already adapted to app based ordering, tracking and
payments as well.

~~~
alexbanks
Yeah, both companies existed to "disrupt" the traditional taxi industry and I
think they succeeded. Traditional cabs have changed a lot (while continuing to
charge what rides actually cost).

~~~
def8cefe
Well, they exist(ed?) to make money. They did so by innovating in the taxi
industry. One of them did this by breaking the law in every jurisdiction they
operated in then lobbying to make their conduct legal after the fact.

But yes, they did disrupt the industry and there are now COTS solutions for
taxi brokerages to accept rides in similar ways such as iCabbi.

~~~
alexbanks
That seems like a waste to point out. All companies exist to make money.
That's kind of inherent in being a company. You wouldn't write "To make money"
as your mission statement when opening a business.

~~~
def8cefe
>You wouldn't write "To make money" as your mission statement when opening a
business.

I've made a huge mistake...

------
prodave
As c-suite exec, better to be incompetent during the good times than to be
competent during the bad times. makes sense that he’s leaving.

~~~
dang
Personal attacks are not ok on HN, so please don't post like this. Maybe you
don't owe a c-suite exec better, but you owe this community better if you're
posting here. We're trying to stave off the default internet degeneration, to
the extent possible.

[https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...](https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=by%3Adang%20stave&sort=byDate&type=comment)

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

------
_pmf_
Microworkforces are the new hot thing in SV.

------
hm8
Outline link for non paywall -
[https://outline.com/Yf3CLV](https://outline.com/Yf3CLV)

~~~
AlphaWeaver
This includes the same snippet of the article listed on the website, and
doesn't bypass the paywall, FYI.

------
baron816
> revenue to nosedive by $17 million to $22 million in the quarter.

It's interesting how often news articles get millions and billions mixed up. I
feel like I see it all of the time. Apologies for the digression.

~~~
avree
There's no billion/million mixup here.

Quarterly revenue will be down by 17-22 million.

~~~
baron816
Oh, indeed. Well, the phrasing still easily leads to confusion as it could be
interpreted as falling _to_ $22 million (which is way too little), rather than
falling by a range of $17-22 million.

Would've been better as "revenue to nosedive by between $17 million and $22
million in the quarter"

------
zaroth
> _Uber said it expects an impairment charge of up to $2.2 billion in the
> first quarter due to the outbreak and for revenue to nosedive by $17 million
> to $22 million in the quarter._

The impairment charge is on the “reduced value of equity investments”. Not
sure what that’s about.

But “revenue to nosedive $22 million...” this makes no sense. Last year Uber
reported a net loss of $8.51 _billion_.

I think $22 million is the cost of programs it has put in place to help
drivers during the pandemic. In other words, a pittance.

Last report was that Uber traffic had cratered 60-70% in Seattle as of March
19th. I can only imagine the world of hurt Uber is in for based on a global
60-70% revenue drop in the face of their fixed costs. $22 million ain’t it.

~~~
yashap
Indeed. In 2019 they had GAAP revenue of $14 billion (and GAAP net loss of
$8.5 billion). The article is clearly wrong, their quarterly revenue is way
above $39 million - they haven’t reported Q1 2020 earnings yet, but revenue
will be in the billions.

Regardless, layoffs are necessary. Even before COVID, Uber was burning money
at an absolutely insane rate, and really don’t have much runway for a public
company. Obviously COVID makes the situation much worse. Heavy layoffs suck
for everyone who loses their job, but they are necessary here.

------
DevKoala
I wonder if the CTO really "resigned" or was kicked out. Uber's engineering
culture is well known for not thinking about costs early in development.
Moreover, ignoring infra costs, the revenue per engineer is really low, it is
at around 1 million dollars per engineer; 11BN revenue / 10k engineers.

I work for a team in which the revenue per engineers is 2 times higher than
that and we aren't any sort of unicorn.

~~~
newfriend
Do you have a source for them having 10k engineers? That seems extremely high.
I'm going to guess that you are wrong, and grossly exaggerating numbers to
stroke your ego or because of bias.

Also I'm sure you understand that things change with scale. Comparing a tiny
irrelevant company to a global one may not be as straightforward as you think.

 _Edit_

From the article:

> which comes as the 3,800-person Uber engineering group

I was right, your numbers are way off.

~~~
DevKoala
I got my numbers from a projection that also had them at 11BN revenue by now.
The actual number for 2019 is 4.1BN. So yeah, Uber makes earns very little per
engineer/product member compared to healthy companies.

[https://investor.uber.com/news-events/news/press-release-
det...](https://investor.uber.com/news-events/news/press-release-
details/2020/Uber-Announces-Results-for-Fourth-Quarter-and-Full-Year-2019/)

Btw, no bias, but interesting that you took it there. What motivated the
comment? Can't someone be critical of the performance of an executive? It
seems that a lot of people believe that running things at scale somehow
requires defying basic business principles, when in reality is quite the
contrary. You need to be even more vigilant of those metrics.

~~~
newfriend
> The actual number for 2019 is 4.1BN

You are wrong, again. 4.1BN is the revenue for Q4. From your very own link:

> GAAP Revenue 2019: $14BN

So yeah, I guess it's much healthier than your company isn't it?

It's fine to be critical, but let's not make up fake numbers and then draw
conclusions from that. There also seem to be many people here who are overly
critical of Uber specifically because of it's image.

~~~
DevKoala
I see I was wrong. I am not making up fake data, I read the data wrong.

