Lyft (LYFT) confirms termination of 13% of work force, maintains guidance
(Updated - November 3, 2022 12:12 PM EDT)
Lyft (NASDAQ: LYFT) disclosed:
On November 3, 2022, Lyft, Inc. (the “Company”) confirmed there have been no changes to its previously issued guidance regarding: its third quarter 2022 revenues, Contribution Margin and Adjusted EBITDA, and its 2024 financial targets for $1 billion in Adjusted EBITDA with more than $700 million in free cash flow. These targets were issued during the Company’s second quarter 2022 earnings conference call on August 4, 2022. The announced reduction in force is a proactive step to ensure the Company is set up to accelerate execution and deliver strong business results in Q4 of 2022 and in 2023. As previously announced, the Company is scheduled to report its third quarter 2022 financial results on Monday, November 7, 2022.
Item 2.05 Costs Associated with Exit or Disposal Activities
On November 3, 2022, the Company committed to a plan of termination as part of the Company’s efforts to reduce operating expenses and adjust cash flows as described in Item 2.02 above. The plan involves the termination of approximately 683 employees, representing 13% of the Company’s employees. In connection with the plan of termination, the Company estimates that it will incur approximately $27 million to $32 million of restructuring and related charges related to employee severance and benefits costs, which the Company expects to incur in the fourth quarter of 2022. As part of the restructuring charges for this plan of termination, in the fourth quarter of 2022 and first quarter of 2023 the Company expects to record a stock-based compensation charge and corresponding payroll tax expense related to equity compensation for employees who were terminated and restructuring charges related to a decision to exit and sublease or cease use of certain facilities to align with the Company’s anticipated operating needs. The Company cannot reasonably estimate these charges at this time since they depend in part on the Company’s future stock price, and the Company will file an amendment to this 8-K to disclose these additional charges.