Online taxi service to lay off 683 employees

Lyft said on Thursday it would lay off 13% of its workforce, or about 683 employees, in the ride-hailing firm’s latest cost-cutting step to cope with a weakening economy.

As decades-high inflation hits consumer spending and drives up costs for businesses, companies across sectors are cutting jobs and downsizing their operations to preserve profits.

Lyft’s latest move is expected to result in a charge of between $27 million and $32 million in the fourth quarter. It follows 60 job cuts earlier this year and a hiring freeze in September.

The company, which is slated to report third-quarter results on Monday, said the layoffs would not impact its previously issued forecast for the period. It expects revenue of $1.04 billion to $1.06 billion and adjusted core profit of $55 million to $65 million.

The San Francisco, California-based company’s shares were down 1%.

“The announced reduction in force is a proactive step as part of the company’s annual planning,” Lyft said in a statement.

Companies such as Lyft and Uber Technologies Inc (UBER.N), which rely on gig workers, have lately faced concerns that a Labor Department proposal seeking to limit the use of independent contractors could drive up costs.

But experts believe that legal challenges and business groups lobbying for changes could derail the Biden administration’s efforts.