Uber Losses Prompt Hiring Freeze

Uber Technologies Inc. (NYSE: UBER), facing mounting losses, has instituted a hiring freeze for several departments in the company. According to an Uber spokesman, a hiring freeze for software engineers and product managers will extend through the end of the year. Last week, Uber announced the elimination of 400 marketing positions around the world.

In a statement, the spokesman said, “We are continuing to aggressively hire talent, including many engineers, all over the world. We temporarily hit pause on some teams while we ensure we’re being both effective and efficient in staffing against our strategic priorities.” The freeze does not apply to Uber’s autonomous vehicle and freight-shipping divisions.

The decision comes as Uber reported disappointing results for the second quarter of its fiscal year. Uber reported it lost $4.72 a share in the second quarter on revenue of $3.17 billion. That equates to a $5.24 billion net loss, its biggest ever. Wall Street had been expecting a loss of $3.12 a share on revenue of $3.36 billion.

The second quarter results did include more than $4 billion in one-time charges related to Uber’s initial public offering (IPO). That has led Uber chief executive Dara Khosrowshahi to vow that the record loss will never happen again. But even without the IPO-related charges, the company still had $1.2 billion in operating losses, higher than the $1 billion the company lost in the first quarter.

Reports are emerging that Uber employees are concerned that the hiring freeze could be a prelude to broader cuts. The company’s stock is down 11 percent from its May IPO price and lost 6 percent in after-market trading after the earnings release. Uber had $13.7 billion in the bank at the end of the second quarter. Khosrowshahi has said that he expects Uber’s business to be “very profitable” when it reaches maturity, but he has not given any indication as to when that might be.