Uber CEO tells employees that he's cutting costs like 'anniversary balloons' as nervous engineers worry about layoffs
- Uber CEO Dara Khosrowshahi held an all-hands meeting on Tuesday and the big topic under discussion was cost-cutting.
- For instance, Uber is getting rid of work anniversary balloons, which he said he expects will save the company about $250,000.
- But cost-cutting will not be so extreme that directors will be forbidden from traveling business class, sources say.
- Employees are nervous that Uber may be ramping up toward some sort of layoff that impacts its all-important engineering groups.
Uber CEO Dara Khosrowshahi held an all-hands meeting on Tuesday and the big topic under discussion was cost-cutting.
Employees are nervous that Uber may be planning some sort of layoff that impacts its all-important engineering groups. These nerves have been on the rise since Uber laid off 400 employees from its global-marketing team a few weeks ago in what employees described as a "bloodbath" to Business Insider. The layoffs were part of Uber's efforts to streamline its operations and reduce spending, The New York Times reported.
The company also initiated a hiring freeze in certain engineering organizations, too, but it has not commented on layoffs to employees or publicly.
The company has told employees that it will be focused on addressing inefficiencies in the organization and that it is getting more serious about performance management, Uber says.
To some inside the company, those words sound like the prelude to layoffs perhaps with contractors at the greatest risk.
As for cost-cutting, Khosrowshahi told employees on Tuesday that he was looking at ways to trim expenses.
For example, he said he is eliminating Uber's tradition of "anniversary balloons" and expects to save about $250,000 in the process.
Uber has about 25,000 employees globally, it says, and on their work anniversary, it traditionally sent them a bunch of balloons, including a big, numbered balloon that represented the number of years they worked there.
One employee told Business Insider that people seem ok with ditching anniversary balloons and about cost-cutting generally, as long as it was equitably applied.
For instance, one person submitted a question for the all hands that asked if director-level employees would be asked to cut their travel expenses and, for instance, no longer be allowed to fly business class.
Khosrowshahi told employees that, no, directors would not be asked to give up business class. He said the bulk of travel expenses were from non-director employees anyway. Employees will be asked to be cautious about their travel expenses.
Most employees are happy with Khosrowshahi's leadership according to his Glassdoor ratings, which pegs his employee rating at 94%. But some employees are frustrated by the stock price, which has plunged since he joined the company. Uber had previously reported that stock options granted in 2017 had an average strike price of $41.39.
However, Uber no longer issues stock options, it says. It grants employees restricted stock units, which means employees don't have to buy the stock.
Still, the stock had a fair market value of over $48 when he joined, one person told us. It has struggled to stay above $45 since the IPO and it plunged to new lows after a disappointing earnings report last week.
For Silicon Valley engineers raised on dreams of becoming millionaires on corporate stock and who accept stock as part of their salary, a weak stock price can be a source of frustration.
Some have taken to anonymous chat app Blind to complain and even banter over if Khosrowshahi's job is at risk.
This is nothing more than water cooler gossip but it does show the moral of some employees at the moment. Here's what the poll looked like prior to Tuesday's all-hands meeting.
