According to a New York Times report, Uber Technologies (NYSE:UBER) UBER has laid off roughly 185 people from its Postmates division. The layoffs represent about 15% of the total workforce of Postmates, which Uber acquired last December for $2.65 billion.
The New York Times reported that three people familiar with the matter stated that most members of the executive team at Postmates, including its founder and chief executive Bastian Lehmann, will leave the company. Some of the vice presidents and other executives of Postmates are expected to leave with multimillion dollar exit packages.
Uber, which competes with Lyft (NASDAQ:LYFT) LYFT in the ride-hailing space, might further reduce the pays of some employees, while others might be asked to leave or serve out the end of their contract positions, which could lead to more exits in the coming months, said people with knowledge of the matter.
The job cuts are part of the integration of Uber Eats, Uber’s food delivery division, with Postmates. While Postmates and Uber Eats apps will remain separate, it will be supported by a combined merchant and delivery network. The acquisition strengthens Uber’s delivery business, helping it widen its base in Los Angeles and the American Southwest, where Postmates had a strong base.
While the coronavirus pandemic has caused a slowdown in Uber’s mobility business, with people confining themselves to their homes, the same has boosted its delivery operations. The company has been seeing a significant rise in online order volumes from homebound customers. Notably, revenues and gross bookings from the Delivery segment surged more than 100% year over year in the third quarter of 2020. Delivery revenues are expected to have shown substantial improvement in the fourth quarter of 2020 as well. Results will be available on Feb 10. Within the broader Computer and Technology sector, ANGI Homeservices (NASDAQ:ANGI) ANGI and AMETEK AME will release fourth-quarter 2020 earnings numbers on Feb 3 and Feb 4, respectively.
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