TLDR
- Uber is cutting roughly 10% of its global workforce, around 3,300 positions, as part of a restructuring plan.
- The cuts focus on middle-to-lower management, with a 20% reduction in those layers to flatten the hierarchy.
- Fewer than 1% of employees will work remotely going forward, with most staff moving to key hub offices.
- UBER stock rose 2.1% in premarket trading following the announcement.
- BMO Capital maintained an Outperform rating and $119 price target, citing Uber’s autonomous vehicle strategy as a key growth driver.
Uber Technologies is cutting around 3,300 jobs, roughly 10% of its global workforce, as CEO Dara Khosrowshahi moves to simplify the company’s structure. UBER stock climbed 2.1% in premarket trading on Wednesday following the news.
Khosrowshahi laid out the plan in an internal email, describing the cuts as part of a broader effort to consolidate fragmented teams and concentrate staff in a smaller number of key hub locations.
“Make Uber simpler and faster and create more capacity to invest in our future,” he wrote. Employees affected by the cuts had already been notified by the time the email went out.
The restructuring targets management layers in particular. Uber plans to reduce its deep middle-to-lower management headcount by 20%, with the goal of flattening the corporate hierarchy.
Remote work is also being curtailed. Moving forward, fewer than 1% of Uber’s employees will work remotely. Khosrowshahi argued that the benefits of in-person work “are clearer than ever in our post-Covid world.”
Uber had already been pushing for more in-office presence earlier this year, including expanding its footprint in New York City. This latest move makes that push an explicit company policy.
Khosrowshahi acknowledged the company is “performing so well,” noting that over the past five years Uber’s top line has “nearly tripled.” The cuts come not from financial distress, but from years of rapid expansion creating too many management layers.
The company has grown from its first rides in San Francisco in 2009 into a global platform, and that pace has left the org chart bloated.
Autonomous Vehicle Push
The restructuring also frees up resources for Uber’s next big bet. The company has committed $10 billion to building out its robotaxi business over the coming years.
Uber has been repositioning itself as a diversified marketplace platform rather than just a ride-hailing app, and analysts are watching closely to see how much value it can capture from the autonomous vehicle wave.
BMO Capital reiterated an Outperform rating and a $119 price target on UBER on Monday, citing the company’s expanding AV infrastructure and growing partner base. Analyst Brian Pitz said this positions Uber as the preferred mobility platform for AV manufacturers.
Wall Street’s View
Wall Street broadly agrees. The consensus rating on UBER is Strong Buy, with price targets ranging from $70 to $150.
Rosenblatt recently initiated coverage with a Buy rating and a $100 target. Citizens reiterated a Market Outperform with the same target, pointing to positive data from Waymo’s trip growth and robotaxi expansions.
Nevada’s Transportation Authority has also granted Uber a permit for 1,000 commercial robotaxis, alongside approvals for Tesla and Waymo.
Uber’s market cap currently sits at $153.5 billion, with revenue growth of 16.7% over the last twelve months. The stock was trading around $75.24 before Wednesday’s premarket move.
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