Tag Archives: Lyft

Amazon Layoffs to Hit Over 17,000 Workers, the Most in Recent Tech Wave

Amazon.

AMZN -0.79%

com Inc.’s layoffs will affect more than 17,000 employees, according to people familiar with the matter, the highest reduction tally revealed in the past year at a major technology company as the industry pares back amid economic uncertainty.

The Seattle-based company in November said that it was beginning layoffs among its corporate workforce, with cuts concentrated on its devices business, recruiting and retail operations. At the time, The Wall Street Journal reported the cuts would total about 10,000 people. Thousands of those cuts began last year.

The rest of the cuts will bring the total number of layoffs to more than 17,000 and will be made over the coming weeks, some of the people said. As of September,

Amazon

AMZN -0.79%

employed 1.5 million people, with a large percentage of them in its warehouses. The layoffs are concentrated in the company’s corporate ranks, some of the people said.

Amazon

was one of the biggest beneficiaries of the Covid-19 pandemic as customers flocked to online shopping. The rush to Amazon’s various businesses, from e-commerce to groceries and cloud computing, pushed forward years of growth for the company. To keep up with demand, Amazon doubled its logistics network and added hundreds of thousands of employees.

When demand started to wane with customers moving back to shopping in stores, Amazon initiated a broad cost-cutting review to pare back on units that were unprofitable, the Journal reported. In the spring and summer, the company made targeted cuts to bring down costs, shutting physical stores and business units such as Amazon Care. Amazon later announced a companywide hiring freeze before deciding to let employees go.

Many tech companies have cut jobs as the economy sours. Amazon’s layoffs of more than 17,000 employees would represent the highest number of people let go by a tech company in the past few months, according to tallies released on Layoffs.fyi, a website that tracks the events as they surface in media reports and company releases.

The trend has affected companies such as Amazon and others that have acknowledged they grew too quickly in many cases.

Facebook

parent

Meta Platforms Inc.

said it would cut more than 11,000 workers, or 13% of its staff, adding to layoffs at

Lyft Inc.,

HP Inc.

and other tech companies. On Wednesday,

Salesforce Inc.

said that it was laying off 10% of its workforce. Co-Chief Executive

Marc Benioff

said the business-software provider hired too many people as revenue surged earlier in the pandemic. “I take responsibility for that,” he said.

Write to Dana Mattioli at dana.mattioli@wsj.com and Jessica Toonkel at jessica.toonkel@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the January 5, 2023, print edition as ‘Amazon Layoffs To Exceed Initial Reports.’

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Take-Two Interactive, Lyft, TripAdvisor and more

Take a look at some of the biggest movers in the premarket:

Take-Two Interactive (TTWO) – Take-Two tanked 17.4% in the premarket after the videogame publisher cut its bookings outlook for the year. Take-Two has been impacted by weaker mobile and in-game sales, although CEO Strauss Zelnick said the situation should improve within the next three to six months.

Lyft (LYFT) – Lyft sank 17.3% in premarket action after its latest quarterly report showed slowing revenue growth and ridership levels that remain below pre-pandemic levels. The ride-hailing service did, however, report better-than-expected earnings for its latest quarter.

TripAdvisor (TRIP) – TripAdvisor shares plummeted 20.8% in premarket trading after the travel website operator’s quarterly earnings came in below Wall Street forecasts. TripAdvisor said currency fluctuations had a meaningful negative impact on revenue and that travel demand remains strong.

Lordstown Motors (RIDE) – Lordstown shares rallied 14.6% in the premarket following news that contract manufacturer Foxconn will invest up to $170 million in the electric vehicle maker and become its largest shareholder.

DuPont (DD) – DuPont rallied 3.7% in the premarket after the industrial materials maker beat top and bottom line estimates for the third quarter. DuPont’s upbeat results came despite higher costs for raw materials and energy.

Coty (COTY) – The cosmetics company reported earnings that matched Wall Street estimates, with revenue slightly above analysts’ forecasts. Demand for Coty’s products held up despite higher prices, although it did take a hit from a stronger U.S. dollar. Coty rallied 3.2% in premarket trading.

Planet Fitness (PLNT) – The fitness center operator’s stock surged 7.1% in the premarket after its quarterly revenue and profit beat Wall Street estimates and it raised its full-year forecast. Its membership reached record highs during the quarter, with members visiting more frequently.

Perrigo (PRGO) – The over-the-counter drug and health products maker fell short on both the top and bottom lines for its latest quarter, and it also lowered its full-year forecast. Labor shortages and a stronger U.S. dollar were among the factors weighing on Perrigo’s results. Its stock slid 3.2% in premarket trading.

Qiagen (QGEN) – Qiagen gained 3.4% in premarket trading after the biotech company raised its full-year outlook, pointing to particular strength in its non-Covid product portfolio.

Medtronic (MDT) – Medtronic fell 5.5% in premarket action following the release of study results involving a device aimed at tough-to-treat hypertension. The device did reduce blood pressure in patients, but only slightly more than medications to treat the ailment.

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Lyft to Lay Off About 700 Employees in Second Round of Job Cuts

Lyft Inc.

LYFT -0.61%

said it is cutting 13% of staff, or nearly 700 jobs, the latest technology company to say it needed to reduce costs ahead of choppy economic conditions.

Confirming an earlier report by The Wall Street Journal, Lyft co-founders

John Zimmer

and

Logan Green

announced the cuts to staff Thursday. “There are several challenges playing out across the economy. We’re facing a probable recession sometime in the next year and ride-share insurance costs are going up,” they wrote in the memo viewed by the Journal.

“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,” they added.

The ride-hailing company has more than 5,000 employees, which don’t include its drivers. Lyft laid off 60 people, or under 2% of its workforce, in July. In May, it said it planned to slow hiring and reduce the budgets of some of its departments.

Technology companies large and small have been announcing hiring freezes or staffing cuts this year after many hired at a breakneck speed through the pandemic and now confront a tougher economic outlook. This week,

Amazon.com Inc.

told employees it is pausing corporate hiring and payments startup Stripe Inc. said Thursday that it is laying off about 14% of its employees. Both blamed the harsh economic climate for their decisions.

San Francisco-based Lyft also said that it would sell its vehicle service centers and that most of that team is expected to receive roles from the acquiring company, which it didn’t name. Lyft has centers in nine markets.

The company maintained its third quarter and 2024 earnings outlook but said it expects to incur $27 million to $32 million in restructuring related to Thursday’s layoffs in this year’s fourth quarter. The company posts third-quarter results Monday.

Lyft shares have underperformed the broader market over the past 12 months. Through Wednesday’s close, its stock was down 71% from a year ago while the tech-heavy Nasdaq Composite Index was down 33%.

Rival

Uber Technologies Inc.’s

diversified business, which includes global rides operations and a food-delivery arm that became its lifeline during the pandemic, has fared better with Wall Street. Its stock is down about 37% in the past year.

In May, Uber said it would slow hiring. Both companies have struggled with a driver shortage over the past year, an imbalance that has pushed ride fares to record highs. Uber said active drivers and riders returned to prepandemic levels for the first time in this year’s third quarter.

Write to Preetika Rana at preetika.rana@wsj.com and Emily Glazer at emily.glazer@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Live stock market news: Stocks choppy as recession warnings mount, Uber and Lyft react to gig worker proposal, Amazon’s Prime Day

Symbol Price Change %Change
I:DJI $29,202.88 -93.91 -0.32
SP500 $3,612.39 -27.27 -0.75
I:COMP $10,542.10 -,110.30 -1.04

U.S. stocks whipsawed early Tuesday morning as investors voice concerns about the Federal Reserve tightening rates and making borrowing more difficult.

Stocks fell Monday, continuing a stretch of volatility as concerns about Federal Reserve tightening, escalation in the Ukraine war, and China-trade policy shake markets. 

The S&P 500 turned lower after opening with slight gains, shedding 27.27 points, or 0.7%, to close at 3612.39. The Dow Jones Industrial Average edged down 93.91 points, or 0.3%, to 29202.88 while the Nasdaq Composite fell 110.30 points, or 1%, to 10542.10. That’s the lowest closing value for the tech-heavy Nasdaq since July 2020, according to Dow Jones Market Data.

Shares of chip-manufacturers suffered losses stemming from the Biden administration’s new restrictions imposed on semiconductor exports, aimed at hampering China’s military.

The PHLX Semiconductor Sector dropped 3.5% on Monday to its lowest closing level since November 2020. Those losses also helped drag down stocks for businesses that are major chip users.

“The new restrictions placed on selling semiconductors to China are big reason why we are seeing the downtrend in those stocks,” said Randy Frederick, managing director of trading and derivatives at Schwab Center for Financial Research.

Technology stocks represent about one-fourth of the S&P 500, noted Mr. Frederick. Chip maker Qualcomm sank $6.31, or 5.2%, to $114.60 on Monday while Broadcom fell $22.78, or 5%, to $437.70. Technology was the worst performer among the S&P 500’s 11 sectors, down 1.6%.

Shifting expectations about more interest-rate increases from the Fed have been the primary driver of recent stock-swings.

Friday’s jobs report showed the labor market is still tight as the unemployment rate fell back to a half-century low, exacerbating concerns that the Fed could tighten financial conditions more aggressively.

Hopes for a “Fed pivot” — in which the central bank would pause interest-rate increases and jolt stocks higher — have largely been dashed.

Traders now expect the benchmark federal-funds rate to touch 4.7% by the second quarter of 2023, according to FactSet derivatives data, more aggressive than the Fed’s own forecasts.

“Inflation is still high and the labor market is red hot — there’s nothing to suggest the Fed will be dovish or pivot for at least several months,” said Michael Antonelli, market strategist at Baird. Investors are looking ahead to the next U.S. inflation data release Thursday as another important indicator for where monetary policy might be headed.

“There’s still that hangover in markets. The U.S. labor market is still incredibly strong and the Fed has a single mandate right now: inflation, ” said Fahad Kamal, chief investment officer at Kleinwort Hambros. “The most important number in the world right now” is the coming inflation figure, he said.

Meanwhile, Asian shares were mostly lower on Tuesday as losses in technology-related shares weighed on global benchmarks. 

Taiwan dropped 4.4% after reopening from a holiday in the first trading session since the U.S. imposed new limits on exports of semiconductors and chip-making equipment to China. TMSC, the world’s biggest chipmaker, plunged 8.3%. 

Japan’s Nikkei 225 declined 2.6% to 26,401.25. South Korea’s Kospi lost 1.8% to 2,192.07. Both markets also were reopening after holidays on Monday. Hong Kong’s Hang Seng dropped 2.2% to 16,830.73. The Shanghai Composite gained 0.2% to 2,979.79, while Australia’s S&P/ASX 200 lost 0.3% to 6,645.00. 

“Japan and South Korean markets are catching up to previous global market losses, with their exposure to the tech sector spurring a greater extent of the sell-off as mirrored in Wall Street,” Yeap Jun Rong, a market strategist at IG in Singapore, said in a report. 

In a bit of encouraging news, Japan reopened to generally unrestricted tourism on Tuesday after more than two years of COVID-19 restrictions. Pent-up travel spending could help lift the world’s third largest economy as it grapples with slowing global growth and inflation.



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PG&E, Lyft, Las Vegas Sands, more

Check out the companies making headlines before the bell:

Planet Fitness — Shares of the gym franchise jumped nearly 3% in premarket trading after Raymond James upgraded the stock to strong buy from market perform. The Wall Street firm said the company has a resilient and recession-resistant business with no interest rate risk and very little near-term debt
maturities. Meanwhile, its current valuation is well below its recent historical average, Raymond James noted.

PG&E — The utility stock climbed more than 5% premarket after S&P Dow Jones Indices on Friday said PG&E will replace Citrix Systems in the S&P 500, effective prior to the opening of trading on Monday, October 3. Vista Equity Partners is acquiring Citrix Systems in a transaction expected to be completed this week

Las Vegas Sands — Shares of the casino operator surged more than 7% after Macao announced its plan to allow tour groups from mainland China as soon as November. Shares of MGM Resorts rose more than 2%.

Lyft — Shares of the ride-hailing company fell nearly 4% premarket after UBS downgraded the stock to neutral from buy. The Wall Street firm cited its driver survey that indicates drivers prefer Uber and Lyft is not their main app.

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Lyft Lays Off About 60 Employees, Folds Its Car Rentals for Riders

Lyft Inc.

has shed about 60 people while hitting the brakes on renting its cars to riders and consolidating its global operations team, according to people familiar with the matter and an employee memo reviewed by The Wall Street Journal.

The cuts covered less than 2% of staff and mainly affected employees who worked in operations, the people said. In a memo to some staff sent Tuesday, the company said it was folding the part of its business that allowed consumers to rent its fleet of cars on the app.

“Our road to scaling first party rentals is long and challenging with significant uncertainty,” according to the memo, sent by Cal Lankton, vice president of fleet and global operations at Lyft. Mr. Lankton wrote that conversations about exiting the business started last fall and “then accelerated as the economy made the business case unworkable.”

Lyft shares rose around 8% Wednesday to close at $14.70, while the tech-heavy Nasdaq Composite Index climbed less than 2%.

The company said it is going to continue working with big car-rental companies. Lyft’s car-rental business had five locations while it has car-rental partnerships with

Sixt

SE and

Hertz Global Holdings Inc.

in more than 30 locations, a spokeswoman said.

“This decision will ensure we continue to have national coverage and offer riders a more seamless booking experience,” the spokeswoman said in a statement.

The company also is reorganizing its global operations team, consolidating from 13 to nine regions and closing a location in Northern California and its Detroit hub, according to the memo.

Lyft joins other tech companies that are trimming staff or scaling back hiring plans as economic challenges cool the once-hot sector. The industry has been hiring at a rapid pace for years, but easy money is drying up and share prices have been plunging amid the reversal of some pandemic trends, high inflation, supply-chain shortages and growing worries about an economic slowdown.

Lyft’s stock has fallen more than 70% in the past 12 months compared with the less than 20% decline in the Nasdaq Composite Index.

In May, rival Uber Technologies Inc. said it would slow hiring. Its stock has halved over the same period.

Last week, Alphabet Inc.’s Google said it will slow hiring for the rest of the year while Microsoft Corp. cut a small percentage of its staff, attributing the layoffs to regular adjustments at the start of its fiscal year. Rapid-delivery startup Gopuff cut 10% of its staff last week, citing growing concerns about the economy.

Earlier this month,

Facebook

-parent Meta Platforms Inc.’s head of engineering told managers to identify and push out low-performing employees, according to an internal post. Snap Inc. Chief Executive

Evan Spiegel

recently told staff the company would slow hiring, warning that the economy “has definitely deteriorated further and faster than we expected.”

In May, Lyft President

John Zimmer

said in a staff memo the company planned to slow hiring, reduce the budgets of some of its departments and grant new stock options to some employees to make up for its eroding share price. At the time, Mr. Zimmer said the company didn’t plan to cut staff.

After enduring the pandemic, ride-share companies like Uber and Lyft are now facing a new world of high inflation, driver shortages, and dwindling passenger numbers. WSJ’s George Downs explains what they’re doing to try and survive. Illustration: George Downs

Write to Preetika Rana at preetika.rana@wsj.com and Emily Glazer at emily.glazer@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Drivers’ Lawsuit Claims Uber and Lyft Violate Antitrust Laws

A group of drivers claimed on Tuesday that Uber and Lyft are engaging in anticompetitive practices by setting the prices customers pay and limiting drivers’ ability to choose which rides they accept without penalty.

The drivers, supported by the advocacy group Rideshare Drivers United, made the novel legal argument in a state lawsuit that targets the long-running debate about the job status of gig economy workers.

For years, Uber and Lyft have argued that their drivers should be considered independent contractors rather than employees under labor laws, meaning they would be responsible for their own expenses and not typically eligible for unemployment insurance or health benefits. In exchange, the companies argued, drivers could set their own hours and maintain more independence than they could if they were employees.

But in their complaint, which was filed in Superior Court in San Francisco and seeks class-action status, three drivers claim that Uber and Lyft, while treating them as independent contractors, have not truly given them independence and are trying to avoid giving drivers the benefits and protections of employment status while setting restrictions on the way they work.

“They’re making up the rules as they go along. They’re not treating me as independent, they’re not treating me as an employee,” said one of the plaintiffs, Taje Gill, a Lyft and Uber driver in Orange County, Calif. “You’re somewhere in no man’s land,” he added.

In 2020, Uber and Lyft campaigned for drivers and voters to support a ballot measure in California that would lock in the independent contractor status of drivers. The companies said such a measure would help drivers by giving them flexibility, and Uber also began allowing drivers in California to set their own rates after the state passed a law requiring companies to treat contract workers as employees. Drivers thought the new flexibility was a sign of what life would be like if voters approved the ballot measure, Proposition 22.

Drivers were also given increased visibility into where passengers wanted to travel before they had to accept the ride. The ballot measure passed, before a judge overturned it.

The next year, the new options for drivers were rolled back. Drivers said they had lost the ability to set their own fares and now must meet requirements — like accepting five of every 10 rides — to see details about trips before accepting them.

The drivers said now they lacked both the benefits of being an employee and those of being an independent contractor. “I couldn’t see this as fair and reasonable,” Mr. Gill said.

The inability to view a passenger’s destination before accepting the ride is particularly onerous, the drivers said. It sometimes leads to unanticipated late-night trips to faraway airports or out-of-the-way destinations that are not cost effective.

“Millions of people choose to earn on platforms like Uber because of the unique independence and flexibility it provides,” Noah Edwardsen, an Uber spokesman, said in a statement. “This complaint misconstrues both the facts and the applicable law, and we intend to defend ourselves accordingly.”

A Lyft spokeswoman, Jodi Seth, said in a statement, “Voters in California overwhelmingly supported a ballot measure that delivers what drivers want and can’t get through traditional employment: flexibility and independence.” She added, “Lyft’s platform provides valuable opportunities for drivers in California and across the country to earn wages when and how they want.”

In the lawsuit, the drivers are asking that Uber and Lyft be barred from “fixing prices for ride-share services” and “withholding fare and destination data from drivers when presenting them with rides” and be required to give drivers “transparent per-mile, per-minute or per-trip pay” rather than using “hidden algorithms” to determine compensation.

The drivers are suing on antitrust grounds, arguing that if they are classified as independent contractors, then Uber and Lyft are interfering with an open market by restricting how they work and how much their passengers are charged.

“Uber and Lyft are either employers responsible to their employees under labor standards laws, or they are bound by the laws that prohibit powerful corporations from using their market power to fix prices and engage in other conduct that restrains fair competition,” the lawsuit says.

Experts said the complaint would be a long shot in federal court, where judges typically use a “rule of reason” to weigh antitrust claims against consumer welfare. Federal courts often allow potentially anticompetitive practices that arguably benefit consumers.

For example, Uber and Lyft might argue that the apparent restraints on competition help keep down wait times for customers by ensuring an adequate supply of drivers. The lawsuit argues that allowing drivers to set their own prices would likely lead to lower fares for customers, because Uber and Lyft keep a substantial portion of the fares, and what customers pay typically bears little relationship to what drivers earn.

Whatever the case, courts in California could be more sympathetic to at least some of the claims in the complaint, the experts said.

“If you apply some of the laws mechanically, it’s very favorable to the plaintiff in a state court and under California law specifically,” said Josh P. Davis, the head of the San Francisco Bay Area office of the firm Berger Montague.

“You might get a judge who says: ‘This is not federal law. This is state law. And if you apply it in a straightforward way, pare back all of the gig economy complexities and look at this thing, we have a law that says you can’t do this,’” Mr. Davis said.

Peter Carstensen, an emeritus law professor at the University of Wisconsin, said he was skeptical that the drivers would get traction with their claims that Uber and Lyft were illegally setting the price drivers could charge.

But Mr. Carstensen said a state judge might rule in the plaintiffs’ favor on other so-called vertical restraints, such as the incentives that help tie drivers to one of the platforms by, for example, guaranteeing them at least $1,000 if they complete 70 rides between Monday and Friday. A judge may conclude that these incentives largely exist to reduce competition between Uber and Lyft, he said, because they make drivers less likely to switch platforms and make it harder for a new gig platform to hire away drivers.

“You’re making it extremely difficult for a third party to come in,” Mr. Carstensen said.

David Seligman, a lawyer for the plaintiffs, said the lawsuit could benefit from increasing scrutiny of anticompetitive practices.

“We think that policymakers and advocates and courts across the country are paying more attention and more closely scrutinizing the ways in which dominant companies and corporations are abusing their power in the labor market,” Mr. Seligman said.

The drivers say the rollback of options like setting their own prices has made it more difficult to earn a living as a gig worker, especially in recent months as gas prices have soared and as competition among drivers has started to return to prepandemic levels.

“It’s been increasingly more difficult to earn money,” said another plaintiff, Ben Valdez, a driver in Los Angeles. “Enough is enough. There’s only so much a person can take.”

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Lyft to Pause Some Hiring and Trim Budgets, Citing Economic Slowdown

Lyft Inc.

LYFT -17.27%

will slow hiring, reduce the budgets of some of its departments and grant new stock options to some employees to make up for its eroding share price, joining rival

Uber Technologies Inc.

UBER -9.38%

in outlining cuts as investor optimism cools on tech stocks.

President

John Zimmer

announced the measures Tuesday in a memo to staff.

“It’s clear from our discussions with other business leaders that every company is taking a hard look at how they respond to concerns about an economic slowdown and the dramatic change in investor sentiment,” Mr. Zimmer wrote in an internal memo viewed by The Wall Street Journal.

“Given the slower than expected recovery and need to accelerate leverage in the business, we’ve made the difficult but important decision to significantly slow hiring in the US,” he said.

That includes the company giving priority to fewer initiatives, not filling many of the current open roles and focusing hiring on roles deemed critical, such as those that support its core rides business, Mr. Zimmer said. He said there are no layoffs planned.

Lyft’s board met on Friday to discuss the cuts, said a person familiar with the meeting. Lyft began signaling to some employees recently that there would be a hiring slowdown and cutting of budgets, another person familiar said.

Lyft shares have lost more than 60% since the start of the year, more than double the decline of the Nasdaq Composite Index. After declining more than 15% Tuesday, Lyft shares were up less than 1.5% in after-hours trading after the Journal reported about the plans.

Uber Technologies also has outlined budget cuts. An Uber driver in Paris.



Photo:

Nathan Laine/Bloomberg News

Tech companies that powered the U.S. economy during the pandemic are suffering through a punishing stretch. Concerns about rising interest rates and the reversal of some pandemic trends that bolstered tech revenues have hit the share prices of

Peloton Interactive Inc.,

PTON -8.08%

Netflix Inc.,

Amazon.com Inc.

AMZN -3.21%

and others.

Last month Amazon reported the slowest quarterly revenue growth in about two decades. Netflix lost subscribers during its first quarter for the first time in more than a decade and signaled that losses are set to continue.

Apple Inc.

AAPL -1.92%

cautioned that the resurgence of Covid-19 in China could hinder sales.

The shares of

Snap Inc.

SNAP -43.08%

tumbled 43% Tuesday after it said in a Monday filing that revenue and adjusted pretax earnings for the second quarter will come in below the range the company projected barely a month ago due to weak advertising revenues. Other tech stocks that rely on digital advertising, including Google parent

Alphabet Inc.

GOOG -5.14%

and

Facebook

parent

Meta Platforms Inc.,

FB -7.62%

also fell.

After years of adding jobs at a rapid pace, some tech companies have been broadcasting that they think it is time to take a more cautious approach. The pullback by tech giants raises questions about the direction of the overall U.S. job market and economy.

Meta, Peloton and Uber are among the tech companies that have announced they will slow hiring or re-evaluate their head count in recent weeks.

Among the other issues cooling the long-hot sector: inflation, labor shortages and supply-chain issues.

Uber and Lyft are struggling with a year-long driver shortage that has pushed fares to record highs. The elevated fares have partly resulted in fewer Lyft riders and fewer Uber trips compared with before the health crisis, though both companies’ first-quarter revenue outpaced prepandemic levels on the back of higher prices.

Lyft’s first-quarter results were overshadowed by a weaker-than-expected earnings outlook as the company said it would need to spend more money to incentivize drivers to return. Its stock tumbled more than 35% after the announcement, marking the biggest percentage drop in a single day since the company went public in 2019.

Earlier this month, Uber said it would cut spending on marketing and scale back on hiring as it focuses on turning a profit.

Both companies spent big for years to gain customers and market share. But their 2019 public offerings disappointed, with Wall Street increasingly wanting to see money-losing companies turn a profit.

“As we’ve seen and discussed, public market investors have continued to sharply shift their focus onto a potential recession and a company’s ability to deliver near-term profits,” Mr. Zimmer wrote in Tuesday’s memo.

He went on to write that “our near-term action plan will be focused on accelerating profits—whether we like it or not, that’s the ticket of entry in today’s market.”

Uber and Lyft have trimmed their losses, unloading costly divisions such as their self-driving units and cutting staff during the health crisis. Both companies turned a quarterly adjusted profit before certain expenses like interest, taxes and depreciation last year.

Uber said it expects to be cash-flow positive on a full-year basis this year. If it meets that goal, it would mark the first time the underlying operations of the ride-share and food-delivery giant generate more money than it spends.

Write to Preetika Rana at preetika.rana@wsj.com and Emily Glazer at emily.glazer@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Lyft earnings Q1 2022

A traveler arriving at Los Angeles International Airport looks for ground transportation during a statewide day of action to demand that ride-hailing companies Uber and Lyft follow California law and grant drivers “basic employee rights” in Los Angeles, California, U.S., August 20, 2020.

Mike Blake | Reuters

Shares of Lyft lost more than a quarter of their value in after-hours trading Tuesday after the company provided light second-quarter guidance and warned investors it will have to keep spending on driver incentives.

Here are the key numbers:

  • Earnings per share: 7 cents adj. vs loss of 7 cents expected in a Refinitiv survey of analysts
  • Revenue: $876 million vs $846 million expected by Refinitiv
  • Active riders: 17.8 million vs 17.9 million expected, per FactSet
  • Revenue per active rider: $49.18 vs $47.07 expected, according to StreetAccount

For the second quarter, Lyft said it expects revenue between $950 million and $1 billion. Wall Street was estimating $1.02 billion, per StreetAccount.

The stock fell 27% to $22.50 in extended trading. Should it open there on Wednesday, it will be the lowest stock price for Lyft since October 2020. Larger rival Uber, which reports quarterly earnings on Wednesday, also plunged on Lyft’s results, dropping more than 9% after markets closed.

Lyft reported a net loss for the quarter of $196.9 million versus a net loss of $427.3 million in the same period of 2021. The company said its loss included  $163.2 million of stock-based compensation and related payroll tax expenses.

The ride-hailing company reported 17.8 million active riders, narrowly missing estimates. It’s also a decline from the fourth quarter when Lyft said it had 18.73 million active riders.

Lyft heavily invested in driver incentives during the Covid pandemic and recovery, which has weighed on financials. The supply of drivers had seemed to stabilize but as gas prices shot up across the nation due to the war in Ukraine earlier this year, some investors feared drivers would leave their respective platforms and companies would have to increase their incentives.

Lyft said during its analyst call it will be investing more in driver subsidies in the coming quarter, though it believes that will help “pay off in a healthier marketplace.” It’s unclear how much the company will spend.

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Chipotle, Lyft, Enphase Energy and more

Daniel Acker | Bloomberg | Getty Images

Check out the companies making headlines after the bell:

Chipotle — Shares of the Mexican fast-food chain rose more than 8% in after-hours trading after the company reported quarterly earnings that topped analyst expectations. Menu price hikes helped offset inflation without hurting customer demand. However, Chipotle said it expects same-store sales growth to slow next quarter due to the omicron variant.

Lyft — Shares of the ride-hailing company sank 6% in extended trading after the company reported fewer active riders than in the prior quarter. Still, Lyft beat on the top and bottom lines for its quarterly results.

Enphase Energy — Shares of the renewable energy company surged more than 14% after hours on the back of strong fourth-quarter results. Enphase earned 73 cents per share on revenue of $412.7 million. Wall Street expected earnings of 58 cents on revenue of $396.5 million, according to Refinitiv.

XPO Logistics — Shares of XPO Logistics rose 3% in extended trading after the company posted better-than-expected earnings and revenue for the fourth quarter. The company reported earning of $1.34 per share, topping estimates of 99 cents per share, according to Refinitiv. Revenue also beat estimates.

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