(Singapore 21 June) Singapore-based and US-listed Grab Holdings, Southeast Asia’s leading ride-hailing and food delivery app, is cutting 1,000 jobs or 11% of its workforce, despite the fact that it announced last September that it had no plans to undertake mass layoffs.
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 reorganization 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,” the letter reads.
“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.
Founded in 2012, Grab offers deliveries, rides, and financial services in eight Southeast Asian countries, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
Provides similar services as China’s super apps such as Didi does.
Its shares were up 4.7% premarket after Tan’s announcement to staff. The stock had climbed as much as 5.6% 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% of its workforce in 2022. It laid off a further 600 staff in March, Reuters reports.
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% 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. Grab’s last job cuts were in 2020, when 360 people were laid off in response to the impact of the pandemic.
