Uber freezes hiring of U.S. tech staff, seeks to cut costs

Uber freezes hiring of U.S. tech staff, seeks to cut costs

Uber's second-quarter net loss, widening from a loss of $878 million a year earlier, included $3.9 billion of stock-based compensation expenses related to its IPO earlier this year and almost $300 million in "driver appreciation" related to the stock sale. Excluding that one-time expense, it lost $1.3 billion, or almost twice the $878 million loss of a year earlier.

Uber's revenue growth slowed in the second quarter and its losses widened as it continued to spend heavily on discounting and new businesses.

Zions Bancorporation N.A. acquired a new position in shares of Uber Technologies Inc (NYSE:UBER) in the second quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC).

"There's the meme [going] around, which is, can Uber ever be profitable?"

Khosrowshahi stressed that Uber's ride-hailing service, along with its meal delivery service, each have the potential to "be a spectacular business long-term".

CEO Dara Khosrowshahi said he sees strong prospects for the recently made-public company to begin turning a profit. The company posted revenue of $3.1 billion during the quarter, a 14% increase from the year prior - hardly the rocket ship growth that investors typically expect from newly public technology firms. Khosrowshahi also told analysts that the management believes UberEATS India can meet the same success as its core cab-hailing business.

More news: Hollywood star Richard Gere praises 'extraordinary strength of refugees'
More news: China exports rise despite ongoing trade row with US
More news: Kemba Walker Sees ‘Special’ Quality In USA Basketball’s Celtics Contingent

"Our platform strategy continues to deliver strong results, with trips up 35% and gross bookings up 37% in constant currency, compared to the second quarter of a year ago", Khosrowshahi said.

Uber Eats is growing its customer base. But it accounted for only a modest percentage of Uber's overall business. Along with the hiring freeze, the moves suggest Uber is being more cautious about headcount after years of rapid growth.

For years, Uber was viewed as the darling of Silicon Valley.

The biggest negative is Uber has a lower return on invested capital from its global strategy than rival Lyft does from its domestic push. They are concerned about its history of bleeding money, and its recent slowing growth in the face of stiff competition from a resurgent Lyft in the U.S. and competitors overseas. The company, with 100 million monthly active users, reported $5.23 billion in losses for the second quarter on Thursday.

Both Uber and Lyft remain below their respective IPO prices.

Uber Technologies (NYSE:UBER) last released its quarterly earnings data on Thursday, August 8th.

Related Articles