Uber stock is slightly in the red today after the company announced that it was closing its customer support office in downtown LA and laying off approximately 80 staff members.
Staff at the office were informed without advance notice on Thursday that the office would be shutting down, with all operations being outsourced to a large customer support office the company maintains in Manila. The employees were mostly customer support staffers who were paid hourly and focused on driver outreach, given that Uber (NYSE:UBER) takes the unique position of considering both riders and drivers as customers, with support for both coming from the same department. Uber stock is down about 0.5% today.
“We have decided to close the downtown L.A. office and we will be moving the outreach and innovation work to our Manila C.O.E., where we can continue to support the business as it grows,” said Uber manager Ruffin Chevaleau in a recording taken from the meeting where staff were told of the job losses. “I know that this is a shock. This meeting is to inform you all that today is the last day in this office.” Uber stock is currently trading for $40.92.
Uber has a reputation for being somewhat of a money pit given the fact that the company is yet to post a profit, so the outsourcing to Manila hardly comes as a surprise. The ride-sharing firm posted a loss of US$1.2 billion in Q3 2019, although this was an improvement on the massive US$5.2 billion loss the company reported in the previous quarter. Despite hemorrhaging cash, Wall Street is starting to feel more bullish on Uber stock, which is up nearly 60% since last November as the company eyes Q4 of this year to finally turn a profit.
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That bull run has helped Uber stock return to within touching distance of its debut price of $45.00, following a hugely underwhelming IPO last May in which it raised US$70 million—well short of the anticipated figure of US$120 million.
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