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“After earnings, I spent several days meeting investors in New York and Boston,” Khosrowshahi was quoted by CNBC.
“It’s clear that the market is experiencing a seismic shift and we need to react accordingly.”
The technology market has reversed sharply from its highs during the Covid-19 pandemic, sending the Nasdaq Composite tumbling for a fifth straight week, marking its longest losing streak on a weekly basis in ten years.
In response to the drastically different investor sentiment, Uber intends to cut costs relating to marketing and incentives and will “treat hiring as a privilege,” added Khosrowshahi.
“We have to make sure our unit economics work before we go big,” he said. “The least efficient marketing and incentive spend will be pulled back.”
“We will be even more hardcore about costs across the board.”
The announcement makes Uber the latest tech company to slow down the pace of increasing headcount. Last week, Facebook (NASDAQ:FB) said it will stop or add fewer mid-level and senior roles going forward, while Robinhood (NASDAQ:HOOD) slashed roughly 9% of its headcount.
Uber’s boss said the ride-hailing giant will now attempt to turn a profit on a free cash flow basis instead of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
Uber reported its revenue more than doubled to $6.9 billion in Q1 thanks to a rebound in demand for its rides as coronavirus restrictions eased around the world. However, the ride-hailing company also reported a $5.9 billion loss in the quarter as a result of a sharp decline in its equity investments.
Uber shares are down nearly 3% in premarket Monday.
By Senad Karaahmetovic
