Uber Technologies to cut costs and slow down hiring

In a letter to its employees, Uber Technologies’ chief executive officer Dara Khosrowshahi stated that the company will slash marketing expenditure and reduce recruiting, according to a CNBC report. 

Last week, Facebook-owned Meta Platforms Inc said it would reduce its workforce growth. The ride-hailing company is the latest company to reduce spending in order to have a lean investment strategy.

According to the CNBC story, Khosrowshahi said Uber's strategy change was a necessary response to the "seismic shift" in investor sentiment.

"The least efficient marketing and incentive spend will be pulled back. We will treat hiring as a privilege and be deliberate about when and where we add headcount," the report quoted Khosrowshahi as saying.

Last week, Uber announced its driver base reached a post-pandemic peak, and it expects this trend to continue without substantial investment in incentives, a contrast to rival Lyft Inc, which said it will increase spending to hire more drivers. 

The firm will now seek to gain profitability on a free cash flow basis rather than adjusted earnings before interest, taxes, depreciation, and amortisation, according to the report.

“We have made a ton of progress in terms of profitability, setting a target for $5 billion in Adjusted EBITDA in 2024, but the goalposts have changed,” Khosrowshahi said. “Now it’s about free cash flow. We can (and should) get there fast,” the report added.