Singapore-based Grab Holdings, Southeast Asia’s leading ride-hailing and food delivery app, is cutting 1,000 jobs or 11% of its workforce, its CEO said on Tuesday, 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, chief executive 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,” Tan said in the letter.
“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.
The “superapp”, founded in 2012, offers deliveries, rides and financial services in eight Southeast Asian countries, including Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.
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.
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.
The US-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, payrises for senior managers, and cutting travel and expense budgets.
Reuters