Uber goes on a hiring freeze in its engineering teams after a painful second-quarter operating loss of $5.4 billion

Uber has stopped recruiting new candidates for its engineering teams in U.S and Canada after reporting the largest-ever quarterly loss of $5.4 billion in its second-quarter earnings call. The loss is attributed to heavy competition and IPO expenses.

The second quarter 2019 results were released Thursday, last week. Out of this $5.4 billion Uber paid out almost $4 billion in stock-based compensation as one time charges related to Uber’s IPO, that inflated their loss number. This leaves almost $1.2 billion this quarter which they burned on operations out of which 50% was from Uber Eats subsidies.

The investor report also highlights an increase in bookings (up 31%), active users (up 30%), trips (up 35%), and revenue (up 14%). In July, the Uber platform reached over 100 million Monthly Active Platform Consumers. Their core business, ridesharing has improved its gross margin and unit economics quarter-over-quarter.

Uber also froze hiring for the position of software engineers and product managers across the US and Canada citing Hiring goal exceeding. According to Yahoo, who first reported the news, Uber has canceled scheduled on-site interviews for tech roles. Job applicants were informed that the positions are being put on hold due to a hiring freeze in engineering teams in the U.S. and Canada.  In emails sent to job interviewees, Uber recruiters explained “there have been some changes” and the opportunity has been “put on hold for now,” according to emails reviewed by Yahoo Finance. Hiring remains unaffected for workers in Uber’s freight or autonomous vehicles businesses.

Uber also laid off 400 employees in its marketing department, earlier this month. The cut off was 1/3rd of the 1200-employee Uber marketing team which followed after Uber’s IPO and first-quarter investor report with losses of $1 billion. The reorganized marketing team will be under the leadership of Mike Strickman. Many of Uber’s teams are “too big, which creates overlapping work, makes for unclear decision owners, and can lead to mediocre results,” CEO Dara Khosrowshahi wrote in an email sent to employees and shared with TechCrunch. “As a company, we can do more to keep the bar high, and expect more of ourselves and each other,” Khosrowshahi said the restructuring aims to put the marketing team, and the company, back on track.

The move suggests Uber is getting quite cautious about headcount to ensure their strategic priorities.

In May, Uber drivers went on a two-hour strike in several major cities around the world coinciding with Uber’s IPO. Labor groups organizing the strike protested the companies’ poor payment and labor practices.

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