US rideshare service Lyft on Friday sent word to employees that it plans a major staffing reduction to cut costs.

"We need to be a faster, flatter company," Lyft chief executive David Risher said in an email.

"We will significantly reduce the size of the team as part of a restructuring to focus on better meeting the needs of riders and drivers," the newly appointed CEO announced.

Lyft will notify employees next week as to whether they still have jobs with the San Francisco-based company, which will keep all of its offices closed that day, the chief executive noted.

The company declined to provide details on the number of affected staff, but the Wall Street Journal reported earlier in the day that the move could impact 30% of Lyft's workforce; i.e. more than 4,000 employees.

According to Risher, Lyft plans to use the money it saves to keep prices competitive, improve pick-up times, and give drivers better earnings.

Lyft could see costs slashed by half after the layoffs, the WSJ report suggested.

It is noteworthy that Lyft is Uber's rival in North America. Both companies were recovering from a ridership drop during the Covid-19 pandemic.

Lyft already had a round of major layoffs late last year. In November, the company laid off about 683 employees, or 13% of its then-workforce, to cut costs and cope with stiff competition with Uber.

Lyft's stock had fallen about 11% this year, compared with Uber's price gain of 27.5%, as of Thursday's close.

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