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Uber has announced a significant restructuring of its people operations, cutting nearly a quarter of employees in the division responsible for human resources, recruitment and workplace management. The move comes as the ride-hailing giant seeks to simplify internal processes and streamline decision-making, even as questions continue to swirl across the corporate world about the role of artificial intelligence in workforce reductions.

The company insists this round of layoffs has nothing to do with AI, reported Bloomberg.

Instead, Uber says the changes are part of a broader effort to create a more efficient organisational structure under newly appointed President and Chief Corporate Affairs Officer Jill Hazelbaker.

Uber Restructures Key People Operations Team

The layoffs affect Uber's People and Places division, which oversees hiring, employee relations, workplace operations and broader human resources functions.

According to the company, 23 per cent of employees in the division will be impacted. While Uber did not disclose the exact number of workers affected, a spokesperson told CNBC that the reduction represents "well under 1 per cent" of the company's global workforce of approximately 34,000 employees.

The announcement was communicated internally through a memo from Uber Chief Executive Officer Dara Khosrowshahi.

"The changes are necessary to maximise the effectiveness of the People team and the enormous potential ahead of us," Khosrowshahi wrote.

The restructuring reflects Uber's latest attempt to improve efficiency as it navigates a rapidly evolving business environment and increasing pressure to optimise operations.

Why Uber Says The Cuts Were Necessary

Hazelbaker, who was elevated to the role of president last month, offered a more detailed explanation for the overhaul.

In a note to employees, she said parts of the People organisation had become increasingly difficult to manage due to overlapping responsibilities and fragmented structures.

The goal, she said, is to create a "more connected, modern, operationally excellent organization."

According to Hazelbaker, several teams had gradually drifted away from the business units they were designed to support, creating inefficiencies and unclear lines of ownership.

"Some segments have become complex and fragmented, with overlapping responsibilities, unclear ownership, and teams operating too far from the businesses and partners they support," she said.

The restructuring is intended to remove duplication, improve accountability and align support teams more closely with Uber's operating businesses.

AI Layoffs? Uber Says No

The announcement arrives at a time when technology companies and large corporations worldwide are increasingly linking workforce reductions to advances in artificial intelligence.

Uber, however, has been keen to distance this restructuring from that narrative.

A company spokesperson noted that the layoffs were not connected to AI adoption, despite growing industry concerns that automation is beginning to reshape white-collar jobs.

Khosrowshahi echoed that position in his communication to employees, reiterating that the objective was organisational effectiveness rather than technology-driven replacement.

"These changes are necessary to maximize the effectiveness of the People team and the enormous potential ahead of us," he said.

Yet AI Is Playing A Bigger Role At Uber

While Uber insists AI was not responsible for the job cuts, the company is simultaneously expanding its use of artificial intelligence across multiple functions.

Last month, Khosrowshahi revealed that Uber is hiring fewer employees because existing teams are becoming more productive with the help of AI-powered tools.

The comments highlighted a growing trend across the corporate sector, where companies are increasingly using automation to boost efficiency while slowing the pace of hiring.

However, Uber's leadership has also acknowledged that the economics of AI adoption remain a work in progress.

Chief Operating Officer Andrew Macdonald recently said that productivity gains generated by AI have yet to fully justify the company's spending on AI infrastructure and computing resources.

The remarks suggest that while AI is helping employees work more efficiently, questions remain about the long-term return on investment.

Watching The AI Bill Closely

The restructuring also comes amid heightened scrutiny of Uber's AI-related spending.

Just days before announcing the layoffs, the company introduced formal spending caps for employees using agentic AI tools.

Under the new policy, Uber's basic spending tier has been set at $1,500 per month, with higher limits available depending on the tool and business requirements.

The move follows reports that Uber's technology teams had rapidly consumed budget allocations earmarked for future AI initiatives.

According to The Information, Uber's technology chief recently indicated that the company had exhausted its planned 2026 AI budget within just four months.

Uber's announcement adds to a growing list of workforce reductions across industries in recent months.

Many organisations have cited efficiency improvements, cost management initiatives and evolving operating models as reasons for restructuring. In several cases, AI has been openly identified as a contributing factor.

Uber's position is somewhat different. While the company continues to invest heavily in artificial intelligence and acknowledges that AI is changing how work gets done, it maintains that the latest cuts are primarily about organisational design rather than automation.