With tough competition in ride-sharing and food delivery services in Southeast Asia, Grab slashes its 11% employees.
Heaptalk, Jakarta — Singapore’s giant ride-hailing company, Grab Holding Ltd, is preparing the biggest layoff rounds since the pandemic because the company has faced increasing competition in ride-sharing and food delivery services in Southeast Asia.
According to Bloomberg, the company will soon announce this newest layoff round this week, estimated to impact around 1,000 employees, approximately 11% of its workforce. This job-cutting amount exceeds Grab’s previous round of layoffs of 360 workforces or represents 5% of its employees in 2020.
In response to this decision, the CEO of Grab, Anthony Tan, stated in his written statement, “I want to be clear that we are not doing this as a shortcut to profitability. Over the past couple of years, e have been consistent in managing costs tightly in all areas of our operations and on improving platform efficiency,”
Despite reducing its employees, this Nasdaq-listed company claimed that the team had managed cost-effectively and remains on track to achieve its target for group-adjusted earnings before interest, taxes, depreciation, and amortization break-even in 2023, even without these layoffs.
While Singapore-based Grab leads Southeast Asia’s ride-hailing and delivery markets, the company has yet to reach profitability as it spends to continue competing with its rivals, such as Indonesia’s GoTo. According to the company, Grab reported a loss of USD250 million for the previous quarter in May. However, the report also notes the company’s revenue increased to 130.3%, equal to USD525 million in nearly the quarter of 2023.
On the other hand, shares of Grab have slumped about 70% since its stock-market debut in New York in 2021, even as it has minimized its business losses and pledged to achieve a profit on an adjusted basis by the final quarter of this year.
As is well known, this ride-hailing company possessed 9,942 employees by the end of 2022, excluding the roughly 2,000 Malaysian grocery chain Jaya Grocer, which was acquired in January. Regarding the layoff announcement, Tan did not mention which roles or markets would be affected.
Grab’s restructuring moves aim to ensure the company can navigate the increasingly competitive industry landscape, provide affordable services to broader customers, and solidify its position as a critical player in the Southeast Asian market.
“We believe fundamental step-changes in our operating model and cost structure are needed to build our competitive moat for the longer term. The primary goal of this move is to strategically reorganize ourselves to move faster, work smarter, and rebalance our portfolio in line with our longer-term strategies.” Tan added.
