Grab Holdings, the prominent ride-hailing and food delivery app based in Singapore, is implementing a reduction of 1,000 jobs, which accounts for approximately 11 percent of its workforce.
Grab Holdings CEO Anthony Tan stated that this decision is driven by the necessity to manage costs and ensure the long-term affordability of their services.
In a letter addressed to the employees and reviewed by Reuters, Tan emphasized that these layoffs, the largest since the onset of the pandemic, are not merely a means to achieve profitability but rather a strategic reorganization to adapt to the evolving business landscape.
Tan acknowledged the rapid pace of change, particularly in technology such as generative AI (artificial intelligence), and the consequential increase in capital costs that directly impact competition. Consequently, Grab aims to combine its extensive scale with agile execution and cost leadership to provide sustainable and even more affordable services while further expanding its reach among the masses.
Tan highlighted that Grab has been proactively managing costs, and even without the layoffs, the company is on track to achieve its target of group adjusted EBITDA breakeven for this year. Grab, founded in 2012, operates as a “superapp” in eight Southeast Asian countries, offering services such as deliveries, rides, and financial services in Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, and others.
These layoffs mirror a similar move made last year by Indonesian tech firm GoTo, which offers services in ride-hailing, e-commerce, and financial services. GoTo also undertook significant cost-cutting measures, including a reduction of 12 percent of its workforce in 2022 and an additional 600 staff layoffs in March.
In May, Grab reported a quarterly loss of $250 million but revealed that its revenue for the first quarter of this year increased by 130.3 percent to $525 million compared to the same period last year. In February, the company issued an optimistic forecast for its full-year revenue in 2023 and advanced its timeline for achieving profitability.
The previous round of job cuts at Grab occurred in 2020 when 360 employees were laid off due to the pandemic’s impact. According to its latest annual report, the company employed 11,934 staff as of the end of 2022, including approximately 2,000 from the acquisition of a grocery chain in the previous year.
In September 2022, Grab stated that it had no plans for mass layoffs despite the challenging market conditions. However, in December, Tan informed the staff about the company’s decision to freeze most hiring, senior manager pay raises, and reduce travel and expense budgets.