Uber Technologies Inc. laid off a third of its global marketing employees today, the first cuts the company has made to its staff since going public in May.

Some 400 people in Uber’s marketing department were let go out of a total of 1,200 employees in the group, but that was only a small cut in terms of its overall number of employees: 1.6% of Uber’s global workforce of 24,494.

The layoffs are part of Uber’s efforts to streamline operations and reduce spending, according to The New York Times. In true corporate spin, Uber Chief Executive Officer Dara Khosrowshahi pitched the layoffs differently, telling staff in a memo that “we are not making these changes because Marketing has become less important to Uber. The exact opposite is true: We are making these changes because presenting a powerful, unified, and dynamic vision to the world has never been more important.”

The decision to lay off the staff comes after Chief Marketing Officer Rebecca Messina left Uber in June. With Messina’s departure, Uber consolidated marketing, communications and policy teams under the leadership of Jill Hazelbaker, senior vice president of communications and public policy.

The cuts in marketing shouldn’t come as a great surprise. In 2018, Uber spent 28% of its budget on sales of marketing, Business Insider reported, and that was up 25% over the last year. Although Uber continues to battle competitors in key markets, particularly Lyft Inc. in North America, the company’s marketing budget has continued to boom at the same time it was exiting markets: China in 2016, Russia in 2017 and Southeast Asia in 2018.

Uber’s expenditure problems are not limited to its marketing budget alone. As of its first post-IPO earnings report May 30, Uber reported a loss of $1.034 billion, equal to $2.26 per diluted share. Most of Uber’s business is booming in terms of increasing revenue, but there is one exception. In Latin America, revenue dropped 13% on increasing competition from China’s Didi Chuxing Technology Co. Ltd.

The Latin America numbers do show that marketing remains important for Uber going forward. The company’s dominance in North America, Australia and parts of Western Europe is only a strongly funded and determined competitor away from being challenged.

Photo: Pixabay