As the global economic slowdown continues, companies worldwide are facing significant workforce reductions. Ride-hailing company Lyft is also not immune to this trend, as it plans to cut 1,200 jobs.

According to sources familiar with the company's plans, as reported by the Wall Street Journal on Friday, Lyft is considering job cuts that could impact over 30% of its workforce, which currently stands at 4,000 employees. The company does not classify its drivers as employees.

Lyft's latest announcement of job cuts marks another round of reductions for the company, which had previously cut 700 employees in November. This comes as part of a broader trend of major companies announcing layoffs amid growing concerns over the state of the economy.

Just days after David Risher assumed the role of Lyft's new CEO, the company announced its plans for job cuts, which could potentially result in a 50% reduction in costs, as reported by the Wall Street Journal.

In explaining the decision to implement job cuts, Risher stated in a blog post on the company's website, "we need to bring our costs down to deliver affordable rides, compelling earnings for drivers, and profitable growth. We intend to use these savings to invest in competitive pricing, faster pick-up times, and better driver earnings. All of these require us to reduce our size and restructure how we're organised."

“Next Thursday, April 27, by 8:30 am Pacific Time / 8:30 am local time in Eastern Europe, we’ll send an email with details on your employment status. All offices will be closed on Thursday, including Flexdrive locations,” read the note by the CEO. 

Lyft's spokesperson told Insider that the exact number of employees affected by the job cuts could not be confirmed until next week. However, the spokesperson mentioned in an email statement that David Risher's priority as the new CEO is to enhance the experience for riders, make it more affordable, and increase drivers' earnings.

The spokesperson added, "to do so requires that we reduce our costs and structure our company so that our leaders are closer to riders and drivers. This is a hard decision and one we're not making lightly. But the result will be a far stronger, more competitive Lyft."

Prior to David Risher's appointment as Lyft's CEO last month, the company had been grappling with employee and investor dissatisfaction.

Lyft has been facing tough competition from rivals like Uber, with a loss of market share during the pandemic due to delayed introduction of driver-friendly features and bonuses. As a result, Lyft's stock has plummeted by over 70% in the past year, in contrast to Uber's relatively minor decline of around 2% during the same period.