We know that there is a lot going around the world when we look at the economic situation and one thing that companies can’t afford now is to have losses. We have also seen how companies like Meta, Alphabet and others have already announced job cuts but we are talking about Uber and its logistics division and it is not possible to cut jobs in these divisions as manpower is needed the most. We are getting report from sources that tell us Uber is considering spinning off its logistics division and this will help them narrow focus on just delivery and ride services.
The logistics division of Uber, Uber Freight Logistics, is being considered to be sold either as a publicly listed company via an IPO or even in a sale. Now, we know that such a decision is taken when the company is not performing well at all and the company just needs to get rid of it. Uber’s sources also say that an IPO is more likely but that could also change and even if it goes through, it will still take time as the economic situation is not favorable right now.
Uber’s revenue for the fourth quarter was $8.6 billion which grew unexpectedly as demand for food delivery and ride services grew but the freight division is operating on its own and it is not making any progress as well due to an economic slowdown. Uber Freight already announced cutting 3% of its workforce and it is one of the least growing divisions in Uber’s portfolio which is also the reason why they are considering getting rid of it.
Uber’s CFO Nelson Chai said, “We do expect that you’ll see us getting some traction there, but the overwhelming cycle that’s going on right now more broadly on the freight industry is going to continue to impact our business,”. He added “And so, that business will continue to lag likely versus where we would have hoped.” adding that the cyclical downturn in the business means that the Uber Freight business will continue to struggle compared to other departments going forward.
