Below is an excerpt of a note our co-founders Logan Green and John Zimmer shared with Lyft team members earlier this morning.
In a related SEC filing, Lyft confirmed that there have been no changes in the previously issued guidance regarding third quarter 2022 revenues, contribution margin and Adjusted EBITDA, or our 2024 financial targets for $1 billion in Adjusted EBITDA with more than $700 million in Free Cash Flow. The Company is scheduled to report its third quarter 2022 financial results on Monday, November 7, 2022. The announced reduction in force is a proactive step to ensure the Company is set up to accelerate execution and deliver strong business results in Q4 of 2022 and in 2023.
Please refer to the SEC filing for additional information regarding forward-looking statements and non-GAAP financial measures.
Team,
We just sent an invitation for everyone to join us for an all-hands at 11:00 am PT to share some tough news. Despite efforts to avoid this day, we’ve made the difficult decision to lay off 13% of the team. Additionally, we are pursuing a divestiture (sale) of our first-party vehicle service business, and in that case we do expect most of those team members will be offered roles from the acquiring company.
We know today will be hard. To help provide initial context, we want to share how we made this decision, how we’re supporting departing team members, and what to expect over the coming days.
What’s happening
There are several challenges playing out across the economy. We’re facing a probable recession sometime in the next year and rideshare insurance costs are going up. We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives.Still, Lyft has to become leaner, which requires us to part with incredible team members.
The layoffs impact every organization in the company, and were based on deprioritized initiatives, an effort to reduce management layers, broader savings goals, and, in some cases, performance trajectory.
We are confident in the overall trajectory of the business. It was important to take these proactive actions to ensure we can accelerate execution, stay focused on the best opportunities to drive profitable growth, and deliver strong business results in 2023 and beyond.
Support for departing team members
We understand the real impact this decision has on departing team members. Lyft will offer support to departing team members:
10 weeks of pay.
Healthcare coverage through April 30, 2023, including access to Modern Health.
Accelerated equity vesting for the November 20 vesting date.
Recruiting assistance, including coaching sessions on resumes and interviews.
Team members with 4+ years with Lyft will receive an additional four weeks of pay.
Moving forward
Our priority today is taking care of departing team members, who for many of us are also friends. To those team members, although we know no words are sufficient, thank you for everything you have done for the Lyft community, mission, and business.
We are not immune to the realities of inflation and a slowing economy. We need 2023 to be a period where we can better execute without having to change plans in response to external events — and the tough reality is that today’s actions set us up to do that. It’s our responsibility to take ownership of these decisions and, in the end, protect the future we’re building for the drivers and riders we serve.
Logan & John