Uber has announced plans to reduce its global workforce by 10%, a decision aimed at enhancing the efficiency and simplicity of the ride-sharing enterprise, according to a message from CEO Dara Khosrowshahi shared with employees on the company’s website this Wednesday.

This reduction translates to approximately 3,400 positions, based on the company’s workforce figures from the end of the previous year.

The organization is implementing changes to streamline its hierarchy, simplify team dynamics, and undertake various initiatives to improve overall productivity. Khosrowshahi noted that these layoffs will enable Uber to allocate greater resources towards supporting its drivers, couriers, and merchants, while also fostering innovation, such as advancements in autonomous driving technology.

“To achieve these objectives, we must make intentional decisions regarding the allocation of our personnel, time, and financial resources,” he stated in the internal memo.

A report from Wedbush Securities suggested that these job cuts could save Uber around $1.7 billion.

Additionally, Uber has introduced a new “location strategy” that effectively requires employees to work in person at its primary office locations.

“The advantages of collaborating face-to-face and addressing challenges as a unified team are more apparent now than ever in our post-COVID environment,” Khosrowshahi mentioned. “With this understanding, we are setting clearer guidelines on where roles and teams should be located, aiming to concentrate our teams in fewer key hubs.”

The company has mandated that most remote workers transition to an office location, indicating that only about 1% of its employees will be allowed to continue working remotely in the future.

Founded in 2009 initially as a ridesharing platform, Uber has since diversified into additional sectors, including food and retail delivery services.

On the news of the layoffs, Uber’s stock rose by as much as 2.5% on Wednesday.

Edited by Alain Sherter, with contributions from AFP.