Ridesharing giant Uber, which has been burning through money faster than the Joker ($5.2 billion in the last quarter alone!), has suddenly frozen its hiring of technical and engineering staff in the U.S., according to reports on Friday by Bloomberg and Yahoo News.
Broadly speaking, hiring freezes are rarely a good sign for the future of an organization. Yahoo News reported that Uber has canceled on-site interviews with tech role candidates and has told others that their applications will be put on hold, which has further spooked employees already wary of further cost-cutting after Uber laid off around a third of its 1,200-strong marketing team. The site further wrote that “during a recent all-hands meeting,” executives “didn’t provide any timelines” when asked about possible layoffs in its engineering department.
An Uber spokesperson told Bloomberg that the company had exceeded its hiring goals for the year in its software engineering and product management teams. The spokesperson added that the company is “continuing to aggressively hire talent, including many engineers, all over the world,” and that Uber “temporarily hit pause on some teams while we ensure we’re being both effective and efficient in staffing against our strategic priorities.”
Uber’s May 2019 IPO valued the company at roughly $45 per share, with that value, and it is currently doing poorly at around $40 per share. The company has never been profitable and warned in its IPO filing that it may never do so, as well as that it expected operating costs to increase “significantly” in the “foreseeable future.” As it’s become clear that even squeezing its fleet of gig economy drivers won’t allow the company to stop hemorrhaging cash, Uber has staked its future on autonomous vehicles that might allow it to ditch paid drivers entirely—something that isn’t quite as fanciful as its pivot into the currently all-but-nonexistent flying taxi business, but may never pan out (and certainly seems unlikely to happen anytime soon).
In any case, as Ars Technica noted, Uber still had $13.7 billion in funds at the end of the second quarter, and the $5.2 billion figure for Q2 2019 was in large part due to one-time charges related to its IPO. But regular operating costs still saw the company $1.2 billion in the red, meaning Uber has about two years before it exhausts its current funding unless it trims some fat.