[By Sara Ashley O’Brien]
New York (CNN Business) Lyft (LYFT) is laying off about 90 staffers as part of a restructuring as the business works to prove it can be profitable, the company confirmed to CNN Business on Wednesday.
The layoffs will impact some people on Lyft’s marketing and enterprise sales teams. The job cuts represent just a small portion — about 1.6% — of its overall workforce of 5,500 employees. The news was first reported by the New York Times.
“We’ve carefully evaluated the resources we need to achieve our 2020 business goals, and the restructuring of some of our teams reflects that,” Lyft spokesperson Alexandra LaManna said in a statement. “We are still growing rapidly and plan to hire more than 1,000 new employees this year.”
The news comes as both Lyft and its much larger rival, Uber (UBER), face pressure from investors to clean up their finances and prove they can achieve profitability after making their public market debuts in 2019. For its part, Lyft CEO Logan Green said in October that the company expects to be profitable, excluding certain costs, by the end of 2021.
Uber, which has over 22,000 employees, laid off more than 1,000 corporate workers in several rounds of layoffs last year after going public. Cuts at Lyft in 2019 were limited to its scooters and bikes division.
Meanwhile, the on-demand business model popularized by Uber and Lyft is under threat in their home state of California, where a new law known as AB-5 has made it more difficult for the companies to continue to treat their workers as independent contractors.
Lyft’s stock ended the day down nearly 3%. The company is scheduled to report its fourth quarter earnings in the second week of February.