Grab Holdings, the prominent ride-hailing and food delivery app in South-east Asia, is embarking on a significant workforce reduction, cutting 1,000 jobs, which accounts for approximately 11% of its employees. CEO Anthony Tan, in a letter addressed to employees and obtained by Reuters, explained that the decision to downsize was driven by the necessity to manage costs and ensure the long-term affordability of their services.
Tan emphasized that the rapid pace of change, particularly in technology such as generative AI, has necessitated the strategic reorganization. He acknowledged the rising cost of capital, which directly impacts the competitive landscape. In his letter, Tan stated, “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 job cuts at Grab, the “super app” established in 2012, encompass various business verticals, including deliveries, rides, and financial services, operating in eight South-east Asian nations like Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Following the announcement to staff, Grab’s stock surged by 4.7% in pre-market trading and had previously experienced an increase of up to 5.6% based on a Bloomberg News report detailing the job reductions.
Despite the downsizing initiative, Anthony Tan affirmed that Grab had already implemented cost-saving measures and remains on track to achieve its goal of reaching group-adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) break-even by 2023.
In its latest financial report for the first quarter of 2023, Grab disclosed a revenue growth of 130.3% to US$525 million compared to the previous year, even though it reported a quarterly loss of US$250 million (S$336 million) in May. Earlier this year, Grab provided an optimistic outlook for its full-year revenue in 2023 and accelerated its profitability timeline.
The last round of job cuts at Grab occurred in 2020, where 360 positions were eliminated in response to the pandemic’s impact. According to the company’s annual report, as of the end of 2022, Grab had approximately 11,934 employees, including around 2,000 individuals from its acquisition of a grocery chain.
It is worth noting that in September of last year, Grab announced that it had no plans to undertake mass layoffs despite the challenging market conditions. However, in December, CEO Anthony Tan implemented measures such as freezing most hiring, salary increases for senior managers, and reductions in travel and expense budgets to navigate the economic uncertainties caused by the pandemic.