The Robotaxi arms race begins! Uber (UBER.US) plans to lay off 10% of its workforce to make room for a multi-billion dollar autonomous driving gamble

According to Zhitong Finance APP, Uber Technologies (UBER.US), the global leader in ride-hailing and delivery services, announced on Wednesday Eastern Time that it plans to lay off about 10% of its workforce to streamline management layers and cut costs. This move is aimed at paving the way for Uber’s recently outlined ambitious growth strategy centered on a "fully autonomous AI system (represented by Robotaxi and drone delivery) + global delivery service platform."

Uber CEO Dara Khosrowshahi wrote in an internal email to employees: "The adjustments we’re making today are aimed at achieving two things: making Uber leaner and faster, and creating more room to invest in our future." This includes some major plans the company has previously outlined, namely investing more than $10 billion in the fields of fully autonomous Robotaxi and automated delivery over the coming years.

Shares of the ride-hailing company rose nearly 2% after the layoff plan was revealed. Uber declined to comment on the specific number of layoffs. According to an annual filing, the company employed about 34,000 people as of the end of 2025.

Aiming to Be "Leaner and Faster in the Decision-making Process"

Uber is the latest company to accelerate decision-making and improve efficiency by flattening management or adopting streamlined organizational modes. Tech giants such as Google have also taken similar cost-cutting layoff measures in recent years.

Khosrowshahi did not attribute this round of layoffs to artificial intelligence, though the rapid penetration of frontier AI technologies has been one of the main drivers behind recent waves of layoffs in the tech industry.

The adjustments include cutting nearly half the number of small teams with only one or two direct reports, and reducing by 20% the number of employees with seven levels of separation from the CEO. Khosrowshahi said that at Uber’s current scale, the company is no longer fit for many redundant organizational structures.

Uber will also consolidate more operating teams and concentrate more employees in key hub offices such as New York and San Francisco. Khosrowshahi stated that about 1% of staff will be allowed to continue working remotely.

He said, "A leaner organization means clearer accountability, faster decision-making, and more time spent building products rather than coordinating and communicating."

From Ride-Hailing Giant to "AI Automation Empire"?

Combining Uber’s recent vision of a "fully autonomous system (represented by Robotaxi and drone delivery) + global delivery service platform," this round of layoffs is more of a restructuring of the organization and capital for the Robotaxi era, rather than a traditional demand-driven contraction.

Autonomous taxis address personal travel, while automated delivery solves the movement of goods; both fundamentally rely on high-frequency order dispatch, route planning, supply-demand matching, pricing systems, fleet/robot operations, city-level regulatory interfaces, and local fulfillment networks. In recent years, Uber has re-accelerated its autonomous driving ecosystem deployment, launched autonomous vehicle solutions, and advanced scenarios such as autonomous taxi, vehicle fleet operations, and deliveries together with partners such as Nuro, Lucid, Rivian, MOIA, Hertz. Uber’s official statements have clearly positioned autonomous vehicles, sidewalk delivery robots, and drones as the core methods for Uber Eats to reduce delivery costs and develop unmanned transportation modes in the future.

The company plans to invest more than $10 billion in autonomous vehicles in the coming years, necessitating the streamlining of redundant management, shortening decision chains, and improving strategic capacity for free cash flow; the nearly 2% stock price rise suggests initial market acceptance of this "cost-cutting, increased future tech investment" resource reallocation logic.

With Tesla accelerating the commercialization of autonomous driving and Robotaxi, Uber is finding its core competition has shifted from traditional ride-hailing expansion to the speed of autonomous fleet deployment, operational efficiency, and per-mile economics. Unlike Tesla’s vertical integration of hardware and software, Uber is more likely to leverage user traffic, order dispatch, payment systems, and its global operating network to become the Robotaxi super aggregator platform, connecting multiple autonomous vehicle providers and passenger demand.

This round of layoffs is not Khosrowshahi directly attributing workforce reductions to artificial intelligence, but rather Uber proactively boosting investment capacity for autonomous driving competition. In the short-term, flattening the organization helps reduce costs and improve operating leverage; whether it converts to higher valuations in the long-term depends on whether the over $10 billion investment delivers large-scale Robotaxi, automated delivery robots, drones, and other Uber automation resources, so that, while driving down driver costs, Uber can generate sustainable platform profits.

Multiple signs indicate Uber has recently stepped up its Robotaxi deployment pace. Earlier this year, European luxury car leader Mercedes-Benz, Nvidia (NVDA.US), and Uber Technologies announced a major three-way cooperation project.

In this project, Nvidia will join forces with Mercedes and Uber to build a Robotaxi ecosystem, signifying an expanded lineup of global Robotaxi (fully autonomous taxi) players. The three parties will jointly develop a global Robotaxi platform, utilizing Mercedes-Benz’s new S-Class models, Nvidia’s AI-powered autonomous driving hardware and software stack, together with Uber’s large ride-hailing network, to offer driverless mobility services in major markets around the world.