Lyft to cut some jobs as it restructures its bikes and scooters operation

By Tomi Kilgore

The ride-share company expects to book a charge of up to $46 million in the current quarter

Lyft Inc. disclosed Wednesday a restructuring of its bikes and scooters operation, which will lead to some job cuts and a charge of up to $46 million.

The San Francisco-based ride-hailing company said the restructuring plan is part of a larger effort to cut costs and align strategic priorities.

Lyft's stock (LYFT) rose 2.7% in morning trading, to recover what it lost on Tuesday. The flat start to September follows a five-month losing streak for the stock through August, which is the longest such streak since the company went public in March 2019.

Read: Lyft swings to a profit on record rides, but its earnings outlook comes in light.

As part of the restructuring plan, the company expects to lay off about 1% of its employees, dispose of certain assets related to bikes and scooters and record a charge of $34 million to $46 million.

Lyft had 2,945 employees as of the end of 2023, according to the company's latest annual report, so the layoffs could represent just under 30 employees.

Lyft said it expects to record the restructuring charges primarily in the third quarter of 2024, and the charges should be "substantially completed" by the end of the fourth quarter.

The charges include $32 million to $42 million in costs related to employee severance and benefits and asset disposals.

Lyft said it expects the restructuring plan to boost its annualized adjusted earnings, before interest, taxes, depreciation and amortization (Ebitda), by about $20 million by the end of 2025. "The improvement will primarily be related to headcount reduction savings, operational efficiencies, and commercial strategy enhancements," the company said in a statement.

Separately, Lyft said it was not changing the financial guidance it provided in early August, when the company said it expects to generate positive free cash flow for the full year.

The stock has tumbled 22.2% year to date, while shares of rival Uber Technologies Inc. (UBER) have climbed 17.9% and the S&P 500 has advanced 16.4%.

-Tomi Kilgore

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09-04-24 1106ET

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