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Uber CEO tells employees that he’s cutting costs like ‘anniversary balloons’ as nervous engineers worry about layoffs

Uber CEO tells employees that he’s cutting costs like ‘anniversary balloons’ as nervous engineers worry about layoffs

Uber CEO Dara Khosrowshahi held an all-hands meeting on Tuesday, and the big topic under discussion was cost cutting.

Employees are nervous that Uber may be planning some sort of layoff that affects its all-important engineering groups. These nerves have been on the rise since Uber laid off 400 employees from its global-marketing team a few weeks ago in what employees described as a “bloodbath” to Business Insider. The layoffs were part of Uber’s efforts to streamline its operations and reduce spending, The New York Times reported.

The company also initiated a hiring freeze in certain engineering organizations, but it has not commented on layoffs to employees or publicly.

The company has told employees it will be focused on addressing inefficiencies in the organization and that it is getting more serious about performance management, Uber said.

To some inside the company, those words sound like the prelude to layoffs, perhaps with contractors at the greatest risk.

As for cost cutting, Khosrowshahi told employees on Tuesday that he was looking at ways to trim expenses.

For example, he said he was eliminating Uber’s tradition of “anniversary balloons” and expected to save about $250,000 in the process.

Uber has about 25,000 employees globally, it says, and on their work anniversaries, it traditionally sent them a bunch of balloons, including a big numbered balloon that represented the number of years they worked there.

One employee told Business Insider that people seemed OK with ditching anniversary balloons and about cost cutting generally, as long as it was equitably applied.

For instance, one person submitted a question for the all hands that asked if director-level employees would be asked to cut their travel expenses and, for instance, no longer be allowed to fly business class.

Khosrowshahi told employees that, no, directors would not be asked to give up business class. He said the bulk of travel expenses were from nondirector employees anyway. Employees will be asked to be cautious about their travel expenses.

Most employees are happy with Khosrowshahi’s leadership, according to his Glassdoor ratings, which peg his employee rating at 94%. But some employees are frustrated by the stock price, which has plunged since he joined the company. Uber had previously reported that stock options granted in 2017 had an average strike price of $41.39.

However, Uber no longer issues stock options, it says. It grants employees restricted stock units, which means employees don’t have to buy the stock.

Still, the stock had a fair market value of over $48 when he joined, one person told us. It has struggled to stay above $45 since its initial public offering, and it plunged to new lows after a disappointing earnings report last week.

For Silicon Valley engineers raised on dreams of becoming millionaires on corporate stock and who accept stock as part of their salary, a weak stock price can be a source of frustration.

Some have taken to the anonymous chat app Blind to complain and even banter over if Khosrowshahi’s job is at risk.

This is nothing more than water-cooler gossip, but it does show the morale of some employees at the moment. Here’s what the poll looked like before Tuesday’s all-hands meeting.

Are you an Uber insider with insight to share? We want to hear it. jbort@businessinsider.com, DM on Twitter at @Julie188or through Signal.

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