Some 400 Uber employees were in for an unpleasant surprise last week as the ridesharing company laid off a third of its worldwide marketing staff. The marketing employees, who were stationed in offices in Silicon Valley, New York, Latin America, Europe, Asia and the Middle East, were notified of the sudden changes in their employment status on July 29, a week before the ride-hailing giant was due to report its second-quarter earnings. This was the largest round of layoffs Uber has initiated since 2009.
Uber, which debuted its IPO to a disappointing result earlier this year, has been struggling to maintain with huge losses and a faltering business model that has investors feeling nervous. In an apparent attempt to pull operations even closer to the vest, this most recent move may end up backfiring on the company.
Did Uber make a mistake in laying off such a large number of its internal marketing staff? Only time will tell. However, the biggest takeaway from this action is that marketing isn’t of high value to the powers that be; or at least, it’s assumed that the remaining staff will be able to handle the demands of keeping the marketing machine running.
The undertone of this action is that marketing is not valuable enough for Uber to continue investing in the staffing needed to keep such a large organization running. Previously, Uber’s in-house marketing team was about 1,200 employees strong.
And while 800 employees can still handle their fair share of work, think of just how large of a company Uber is. As the rideshare business continues to grow, and more competitors continue to emerge, having competent and competitive marketing will be necessary in order to navigate through the chaos.
Uber has had its fair share of marketing faux pas—or, at the very least, public relations mishaps—that have caused the company to fall a bit out of public favor. From sexual assault allegations levied at drivers to an ill-fated initiative to put self-driving cars on the road, Uber has had plenty of dark marks on its record.
With that checkered past in mind, is laying off marketing staff the best move? It seems that many large organizations fail to see the value of a highly skilled marketing team. Perhaps in an effort to move budget around or bow to pressure to “lighten the load,” this move seemed to make sense. However, marketing is an ongoing process, and it must be constantly updated and analyzed in order to measure effectiveness.
Putting this responsibility squarely on a staff that has been reduced by 30 percent may not be a recipe for success. Yes, marketing costs money. Yes, it’s a hefty investment that doesn’t always translate directly into revenue.
But in a crowded space full of would-be juggernauts such as Lyft or newcomer Bounce, Uber must remain steadfastly on its toes in order to recover from a less than stellar 2019.
In the meantime, the remaining marketing staff will likely now be tasked with a larger workload, which can interfere with creativity and deep work quality. Of course, this is pure speculation until the results of this layoff are seen. In fact, Uber itself has said that these layoffs are not an indication of Uber’s belief in the value of marketing. Instead, the brand is positioning the move as a way to define a stronger, more unified narrative. Perhaps the dissension in the ranks was higher than the public got wind of.
It remains to be seen whether or not Uber can regain control of its own story. With a leaner marketing staff, the results could likely go in any direction.