AI Is Not Responsible: Uber Layoffs Hit 23% of HR and Recruitment Staff to Fix Complicated Teams

An unexpected shake-up is sending ripples through the tech sector this week as Uber rolls out a sweeping restructuring plan at its corporate headquarters. Leadership decided to push forward with aggressive personnel cuts, catching many employees off guard during what was supposed to be a standard financial quarter.

While speculation immediately pointed toward automation as the driving force behind the sudden departures, internal memos suggest a completely different corporate motive is at play.

Uber is shedding a whopping 23% of its workforce within the People and Places division, which oversees operations ranging from human resources to talent acquisition. The app-based ride-hailing firm disclosed the staff reductions on Wednesday, framing the decision as an effort to streamline the department's structure. This operational shift rolls out under the direction of the company's newly designated President, Jill Hazelbaker.

Deep Cuts to Recruitment and HR Teams

Addressing the workforce via an internal memo, Uber Chief Executive Dara Khosrowshahi framed the restructuring as a vital step for capitalising on the company's prospects. He made it clear that streamlining operations now is the only way to unlock the full power of the department, stating, 'The changes are necessary to maximise the effectiveness of the People team and the enormous potential ahead of us.'

Though Uber kept the precise headcount of redundant roles under wraps, a company representative clarified to CNBC that the reduction impacts 'well under 1%' of their total workforce. With the tech giant employing roughly 34,000 people globally, the cutback is expected to hit only a minor fraction of the overall business.

Untangling Complex and Fragmented Structures

Following her promotion to president and chief corporate affairs officer last month, Hazelbaker reached out to the impacted departments to shed light on the corporate restructuring. She pointed out that the layoffs are part of a broader push to foster a 'more connected, modern, operationally excellent organisation.'

Detailing the issues within the department, she pointed out that certain areas of the People division had grown increasingly unmanageable over the years. She noted, 'Some segments have become complex and fragmented, with overlapping responsibilities, unclear ownership, and teams operating too far from the businesses and partners they support.'

By shaking up the current structure, leadership hopes to eliminate these redundancies and integrate the remaining staff more deeply into daily business operations.

Automation Is Not Responsible for Job Reductions

The timing of the announcement coincides with a broader industry trend where several major corporations are actively tying staff reductions to the rise of artificial intelligence. Uber, however, is distancing itself from that narrative, with a company representative explicitly confirming that these specific job cuts within the People and Places division have absolutely nothing to do with AI implementation.

In a separate message distributed to staff, Uber Chief Executive Khosrowshahi echoed these sentiments, maintaining that the restructuring is crucial for boosting the department's future efficiency. He stressed, 'These changes are necessary to maximize the effectiveness of the People team and the enormous potential ahead of us.'

Balancing Efficiency and Massive Tech Investments

Yet even with automation ruled out as the catalyst for these specific redundancies, the ride-hailing giant continues to integrate AI capabilities across its wider operations whilst actively navigating how the technology fits into its long-term corporate strategy.

Just last month, Khosrowshahi noted that Uber's recruitment pace has naturally slowed as the current workforce gains efficiency through AI tools. Conversely, Uber Chief Operating Officer Andrew Macdonald highlighted an internal imbalance, pointing out that the financial returns from these productivity boosts are failing to offset the substantial capital the firm is pouring into AI tokens.

By executing these cuts, Uber adds its name to a growing registry of corporations contracting their workforces. Over recent months, a multitude of businesses have openly credited artificial intelligence as a primary driver for streamlining operations, pointing to the technology's capacity to automate routine tasks and unlock unprecedented levels of workplace efficiency.

Tight Budgets Following Rapid Spending Spree

These redundancies come hot on the heels of Uber introducing strict budget caps for staff utilising agentic artificial intelligence applications. The company established a baseline spending threshold of $1,500 (£1117.12) each month, though it noted that allowances could scale upward based on specific software demands and team objectives.

This fiscal tightening follows a report from The Information revealing that Uber's technology chief admitted the business completely exhausted its projected 2026 AI budget in a mere four-month window. The news of the staff reductions was originally broken by Bloomberg.