SINGAPORE: Grab announced on Tuesday (June 20) that it will be laying off more than 1,000 employees, affecting around 11 per cent of its workforce.
“I want to be clear that we are not doing this as a shortcut to profitability,” Anthony Tan, the company’s CEO, wrote in a message to the employees. An excerpt was published on Grab’s website.
He called the restructuring “a painful but necessary step.”
“Change has never been this fast. Technology such as Generative AI is evolving at breakneck speed. The cost of capital has gone up, directly impacting the competitive landscape,” Mr Tan added.
This is the biggest round of layoffs Grab has faced since the Covid-19 pandemic.
In 2020, Grab laid off 360 employees as the pandemic affected demand for its services. Back then, that amounted to about five per cent of the company’s full-time employees.
Mr Tan added, “The primary goal of this exercise is to strategically reorganise ourselves, so that we can move faster, work smarter, and rebalance our resources across our portfolio in line with our longer-term strategies.”
He also said that Grab is set to break even in 2023 even without job cuts.
In 2021, the company went public on Wall Street, with shares selling at US$13.
However, value has plunged by as much as 70 per cent since then, with shares selling at US$3.40 earlier this week.
Bloomberg reported that the reductions, whose final number has not yet been set, will be announced next week. The total number of job cuts could vary as conditions change.
The company’s shares rose by 2.3 per cent in the US after the announcement was made on Tuesday.
Although Grab is a leader in the ride-hailing and delivery markets in Southeast Asia, it has not yet reached profitability, partly because of competition from rivals including Indonesia’s GoTo Group.
Grab has been slower to slash expenses than other large tech companies such as Sea Ltd and GoTo, which eliminated thousands of jobs in 2022.
After Grab acquired Jaya Grocer in 2022, more than 3,000 employees were added to Grab’s roster, raising the workforce to over 11,000.