Grab cuts 1000 jobs
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Singapore-based Grab Holdings, Southeast Asia’s leading ride-hailing and food delivery app, is cutting 1,000 jobs or 11 per cent of its workforce, its CEO said on Tuesday, citing the need to manage costs and ensure more affordable services long term.
In a letter sent to employees late on Tuesday and seen by Reuters, chief executive Anthony Tan said the cuts, the biggest since the start of the pandemic, were not “a shortcut to profitability” but a strategic reorganisation to adapt to the business environment.
“Change has never been this fast. Technology such as generative AI (artificial intelligence) is evolving at breakneck speed. The cost of capital has gone up, directly impacting the competitive landscape,” Tan said in the letter.
“We must combine our scale with nimble execution and cost leadership, so that we can sustainably offer even more affordable services and deepen our penetration of the masses.”
Tan said that even without layoffs, Grab had managed costs and should hit its target for group adjusted EBITDA breakeven this year.
The “superapp”, founded in 2012, offers deliveries, rides and financial services in eight Southeast Asian countries, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
Its shares were up 4.7 percent premarket after Tan’s announcement to staff. The stock had climbed as much as 5.6 percent premarket, extending earlier gains on a Bloomberg News report of the cuts.
“We must combine our scale with nimble execution and cost leadership, so that we can sustainably offer even more affordable services and deepen our penetration of the masses.”
The layoffs follow a similar move last year by Indonesian tech firm GoTo, which offers rides, e-commerce and financial services. It has undergone strict cost-cutting, including axing 12% of its workforce in 2022. It laid off a further 600 staff in March.
Its incoming CEO is planning to head the firm only temporarily and quit after improving profitability, sources told Reuters last week.
In May, Grab reported a quarterly loss of $250 million but said revenue in the first quarter of this year rose 130.3 percent to $525 million from a year ago.
In February, it issued an upbeat forecast for full-year revenue for 2023 and brought forward its profitability timeline.
The US-listed Grab’s last job cuts were in 2020, when 360 people were laid off in response to the impact of the pandemic. The company had 11,934 staff as of the end of 2022, including about 2,000 from its acquisition of a grocery chain last year, its latest annual report said.
In September last year, it said it had no plans to undertake mass layoffs despite the weak market. In December, Tan told staff the company was freezing most hiring, payrises for senior managers, and cutting travel and expense budgets.
Questions & Answers
Q.What is the primary reason given for these job cuts at Grab?
What is the primary reason given for these job cuts at Grab?
The CEO stated the cuts are necessary to manage costs effectively and ensure the company can offer more affordable services in the long term, adapting to a fast-changing business environment.
Q.How many employees are being affected by these layoffs, and how does this compare to Grab's total workforce?
How many employees are being affected by these layoffs, and how does this compare to Grab's total workforce?
Grab is cutting 1,000 jobs, which represents 11 percent of its workforce. The company had a total of 11,934 staff as of the end of 2022.
Q.What financial performance did Grab report recently, and what are its profitability targets?
What financial performance did Grab report recently, and what are its profitability targets?
Grab reported a quarterly loss of $250 million, but revenue rose 130.3 percent to $525 million. The company aims to hit its target for group adjusted EBITDA breakeven this year.
Q.Have there been any recent job cuts at Grab prior to this announcement, or other cost-cutting measures?
Have there been any recent job cuts at Grab prior to this announcement, or other cost-cutting measures?
Grab's last job cuts were in 2020, affecting 360 people due to the pandemic. More recently, the company froze most hiring and pay rises for senior managers, while also cutting travel and expense budgets.
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