Grab Holdings, the leading ride-hailing and food delivery app in Southeast Asia based in Singapore, has announced a workforce reduction of 1,000 jobs, which accounts for approximately 11% of its total workforce. The company’s CEO, Anthony Tan, explained that the decision was driven by the need to manage costs and ensure long-term affordability of their services.
In a letter addressed to employees, Tan emphasized that these job cuts were not simply a means to achieve immediate profitability, but rather a strategic reorganization to adapt to the evolving business landscape. He highlighted the rapid pace of technological advancements, such as generative AI, and the impact of increased capital costs, which directly affect the competitive environment.
Tan stated the importance of combining Grab’s scale with agile execution and cost leadership to sustainably offer more affordable services and expand their reach among the masses. He reassured employees that Grab had been effectively managing costs even before the layoffs and expects to achieve its target for group adjusted EBITDA breakeven this year.
Grab, founded in 2012, operates as a “superapp” and provides a wide range of services including deliveries, rides, and financial services across eight Southeast Asian countries. The company’s shares experienced a premarket increase of 4.7% following the CEO’s announcement, with earlier gains reported after news of the job cuts broke.
These layoffs follow a similar trend in the tech industry, as Indonesian firm GoTo also downsized its workforce by 12% in 2022 and laid off an additional 600 employees in March of the same year. Grab’s latest quarterly report revealed a loss of $250 million, but its revenue for the first quarter of this year increased by 130.3% to $525 million compared to the previous year.
Grab had previously implemented job cuts in 2020 due to the pandemic’s impact, resulting in the termination of 360 positions. As of the end of 2022, the company had approximately 11,934 employees, including around 2,000 from the acquisition of a grocery chain. In September of the same year, Grab had stated that mass layoffs were not part of their plans despite the challenging market conditions. However, in December, Tan announced a freeze on most hiring, pay raises for senior managers, and reductions in travel and expense budgets.