Uber Technologies eliminated nearly a quarter of its People and Places division on June 3, 2026, cutting jobs in human resources, recruiting, workplace facilities, and company culture — while the company simultaneously insisted the move had nothing to do with artificial intelligence. The official denial came one day after Bloomberg reported that Uber had capped per-employee AI tool spending at $1,500 per month per coding agent, following a disclosure by Uber's chief technology officer to The Information in April: the company's entire planned 2026 AI budget was gone by the time spring arrived.
The gap between those two facts — a company racing to embed AI tools across its engineering workflows while simultaneously cutting its human-support division and denying any connection — has drawn skepticism from industry analysts and surfaced an internal conflict that Uber's own leadership has not fully resolved.
Hazelbaker's First Move: Flatter, Faster, More Office
Jill Hazelbaker, 44, was named President and Chief Corporate Affairs Officer at Uber on May 11, 2026 — a newly created role that absorbed the People and Places organization from departing Chief People Officer Nikki Krishnamurthy. Uber now has two presidents: Andrew Macdonald holds the title of President and Chief Operating Officer. Both report to CEO Dara Khosrowshahi.
Three weeks after the promotion, Hazelbaker sent an internal memo to affected teams announcing the 23% reduction. Parts of the organization had grown "complex and fragmented, with overlapping responsibilities, unclear ownership, and teams operating too far from the businesses and partners they support," she wrote. The goal, she said, was a "more connected, modern, operationally excellent organization."
In a separate memo, Khosrowshahi framed the cuts as "necessary to maximize the effectiveness of the People team and the enormous potential ahead of us."
The restructuring disproportionately affected senior roles. A company spokesperson confirmed to media that the cuts represented less than 1% of Uber's approximately 34,000 global corporate employees, but declined to disclose the precise headcount. HR employees who previously held remote-work exemptions were also instructed to return to the office at least three days per week — a policy Uber had introduced for the broader company in June 2025.
Uber's AI Budget: Blown in Four Months
The official no-AI explanation lands against a backdrop that Uber's own senior leadership has documented at length. In late 2025, Uber rolled out access to Anthropic's Claude Code — a terminal-based coding agent billed on API token consumption — along with Cursor, an integrated development environment-based AI coding tool. The company actively incentivized adoption through an internal leaderboard ranking engineering teams by total AI tool usage. The strategy worked faster than anyone had budgeted for.
By February 2026, adoption had jumped from 32% to 84% of Uber's roughly 5,000 engineers. Individual per-engineer monthly API costs ranged from $500 to $2,000, depending on usage intensity. By April, CTO Praveen Neppalli Naga told The Information: "I'm back to the drawing board because the budget I thought I would need is blown away already." Today, nearly 95% of Uber's engineers use AI tools monthly, and close to 70% of all committed code is generated by those systems. Around 1,800 code changes are implemented every week by Uber's internal AI coding agent without direct human input.
The spending cap — $1,500 per month per tool — applies specifically to agentic coding platforms like Claude Code and Cursor, not to general AI tools. A spokesperson described the limit as a "soft cap" with tiered spending thresholds and a dashboard employees can use to request exceptions.
But even internal buy-in on the AI bet has been uneven. In an appearance on the Rapid Response podcast, Uber COO Andrew Macdonald acknowledged that it was growing hard to justify the spend: "If you're not actually able to draw a direct line to how [many] useful features and functionality you're shipping to your users, that trade becomes harder to justify."
"AI Washing Is Pervasive Right Now"
Uber's official position — that the HR cuts are purely about organizational design — is not unique. It is, however, increasingly contested terrain. Forrester Research analyst J.P. Gownder, who has studied enterprise AI adoption patterns, told SHRM: "AI washing is pervasive right now. Some of the organizations and leaders who are claiming layoffs due to AI have very self-interested points of view." He also warned that companies announcing AI-related cuts without mature, deployed AI applications ready to absorb the work "are not laying off people because of AI" — they are laying off for financial reasons and hoping AI covers the gap later.
That framing cuts in both directions for Uber. The company's official position is that AI did not cause these cuts — not that AI is taking the work. But its CEO has made no secret of his longer-term views. In a widely cited interview, Khosrowshahi estimated that AI will eventually replace the work performed by 70 to 80% of humans, with knowledge-worker displacement coming within 10 years. When asked what Uber's 9.5 million drivers would do as autonomous vehicles displaced their routes, he said: "I don't know."
The contradiction is structural: a CEO who publicly argues that most human work is destined for displacement, running a company with 95% AI tool adoption among engineers and a blown annual AI budget, is simultaneously telling employees that its HR division reductions have nothing to do with artificial intelligence. That does not necessarily mean the company is being dishonest — organizational restructuring often runs on a different timeline than technical transformation — but it does mean the official explanation leaves the most important questions unanswered.
What Uber Says This Is Actually About
Uber is not entirely without a case for its position. The People and Places division did accumulate structural complexity over years of rapid growth — the kind of organizational sprawl that can build up independently of any technology investment. The company stressed that it is still actively hiring for more than 800 open positions, including roles tied to the commercialization of robotaxi services. Uber's first-quarter 2026 gross bookings reached $53.7 billion, up 25% year over year.
Uber's roughly 10 million drivers, classified as independent contractors, are not affected by the corporate restructuring.
The Society for Human Resource Management's 2026 State of AI in HR report, based on a survey of 1,722 HR professionals, found that AI is 5.7 times more likely to shift job responsibilities and three times more likely to create new roles than to directly displace them. That framing is consistent with Uber's public narrative — but the same report also found a widespread sense of urgency among HR professionals driven by the perception that they are falling behind peers on AI adoption.
How Do AI Coding Tools Burn Through a Budget?
For readers wondering how a company could exhaust a full year's AI budget in four months, the mechanics are worth understanding. Claude Code and Cursor operate on fundamentally different billing models than traditional software: rather than a flat monthly subscription, both charge per API token consumed. A token is roughly equivalent to three-quarters of a word. A single large-scale code refactoring session can consume more than 100,000 tokens. Multiply that across 5,000 engineers running multi-step agentic workflows — where the AI autonomously reads files, executes commands, and iterates across an entire codebase — and token costs scale rapidly.
CTO Naga described watching $1,200 in tokens consumed during a two-hour internal demo as a "head-exploding moment." That figure is not an edge case for heavy agentic workflows — it illustrates the cost structure underlying AI tools that operate with codebase-level autonomy. The $1,500 monthly cap now in place applies per tool, meaning an engineer using both Claude Code and Cursor could spend up to $3,000 before hitting limits.
Uber is not alone in confronting this dynamic. Microsoft recently began canceling many of its direct Claude Code licenses, redirecting engineers toward GitHub Copilot. Walmart has similarly capped access to its internal AI coding assistant. Gartner predicts that by 2030, inference costs on sophisticated AI models will fall 90% from 2025 levels — but notes that cheaper tokens will not necessarily produce cheaper enterprise AI, because agentic models require far more tokens per task than prior-generation tools, and AI providers are unlikely to pass through the full cost reduction to customers.
UBER Stock: Well Below Its Fall Peak
UBER stock has traded well below its 52-week high of $101.99, set in October 2025, closing at $71.62 on June 2. The stock's 52-week range — $68.46 to $101.99 — reflects broader pressure on growth-equity names in 2026. Forty-six analysts covering the stock rate it a Buy, against eight Holds and one Sell, with a consensus price target near $103.
Retail sentiment on Stocktwits remained broadly positive following the June 3 announcement, though at least one commenter described the move as "a pretty aggressive cost-cut."
Frequently Asked Questions
How many Uber employees are affected by the 2026 layoffs?
Uber has not disclosed the exact number of affected employees. A company spokesperson confirmed the cuts represent less than 1% of Uber's approximately 34,000 global corporate employees and account for 23% of the People and Places division, which covers human resources, recruiting, workplace facilities, and company culture.
Is Uber cutting jobs because of AI?
Uber officially says no. The company stated that the People and Places restructuring is driven by organizational complexity and a push to streamline reporting structures — not by artificial intelligence adoption. However, Uber's own data shows that 95% of its engineers use AI tools monthly and that close to 70% of committed code is now generated by AI systems, which analysts say creates structural pressure on back-office and support roles even when companies do not explicitly connect them.
Who is Jill Hazelbaker and why did she cut Uber's HR team?
Jill Hazelbaker is Uber's President and Chief Corporate Affairs Officer, a role created on May 11, 2026, when longtime Chief People Officer Nikki Krishnamurthy departed. Hazelbaker, 44, had spent nearly 11 years at Uber leading marketing, communications, and public policy. Her internal memo described parts of the People and Places division as having grown "complex and fragmented," and she framed the cuts as a move toward a more operationally aligned organization.
What is Uber's AI budget situation in 2026?
Uber's chief technology officer, Praveen Neppalli Naga, disclosed in April 2026 that the company had exhausted its entire planned AI coding tools budget in four months, driven by surging adoption of Anthropic's Claude Code and Cursor among its engineering staff. Uber has since capped per-engineer spending at $1,500 per month per AI coding tool as a "soft limit" with tiered thresholds.
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