SINGAPORE, June 21 — 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 chief executive officer said on Tuesday (June 20), 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, 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.
“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,” he said.
Tan said that Grab had managed costs even without layoffs 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 per cent premarket after Tan’s announcement to staff. The stock had climbed as much as 5.6 per cent premarket, extending earlier gains on a Bloomberg News report of the cuts.
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 per cent 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 US$250 million (RM1.16 billion) but said revenue in the first quarter of this year rose 130.3 per cent to US$525 million (RM2.44 billion) from a year ago.
In February, it issued an upbeat forecast for full-year revenue for 2023, bringing its profitability timeline forward.
The United States-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, pay raises for senior managers, and cutting travel and expense budgets.
— Reuters
