Lyft (LYFT) revealed plans on Thursday to lay off 26% of its staff as the company becomes the latest in the tech space to deepen workforce cuts amid a challenging economic environment.
The announcement will affect 1,072 employees at the rideshare company, which will also scale back plans to fill 250 open positions.
This news comes early in new CEO David Risher's tenure, which began this month. This layoff move will cost Lyft between $41 million and $47 million in severance pay and benefits.
At the end of March, before taking the helm at Lyft, Risher told Yahoo Finance that more cost-cutting was on the horizon.
"Efficiency is also in the air," he said. "I'm very, very comfortable with the idea that you can sort of get twice the team, you know, without twice the people."
Layoffs have been a key feature of tech over the last year, as some of the sector's biggest names like Meta (META) and Amazon (AMZN). Meta particularly has been rewarded in the markets for its massive cost-cutting efforts – the company's shares are up 15% today after Meta's key revenue beats, bolstered by a major headcount reduction.
Previously, Lyft laid off 13% of its staff back in November.
Lyft's stock is down about 9% year-to-date, whereas competitor Uber (UBER) has seen its shares climb about 17% year-to-date.
Uber has been leaving Lyft in the dust as the rideshare market has picked back up in the aftermath of the pandemic. For example, last quarter, Uber's stock popped on impressive revenue growth, while Lyft's tanked on guidance misses.
Uber's market share has been on the upswing in recent years, climbing from 62% in 2020 to 74% this year, according to YipitData cited by The Wall Street Journal. In that same time, Lyft's market share dropped from 38% to 26%. The gap is fundamentally linked to a disparity in both "market and mind share," Wedbush analyst Dan Ives wrote in March as Risher's appointment was announced.
"Losing market and mind share to big brother Uber in the ridesharing battle remains front and center [for Lyft] as the first task at hand while looking to cut costs and get back to a profitable trajectory looking ahead," Ives wrote on March 27.
Additionally, Uber has a more diversified business than Lyft, the crown jewel of which is Uber Eats, a food delivery unit boosted by Uber's roughly $2.65 billion all-stock acquisition of Postmates back in 2020.
Lyft is expected to report its Q1 2023 earnings on May 4.
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.
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