Singapore-based ridesharing platform Grab is sacking around 1,000 employees or around 11 per cent of its workforce. This is the biggest round of layoffs by the Southeast Asian tech major since the pandemic when it cut around 360 jobs in the year 2020.
CEO Anthony Tan sent an email to the employees, informing them about the latest round of job cuts. He said the layoffs were not a “shortcut to profitability” but part of fundamental changes to the company’s operating model and cost structure. He called the decision to lay off employees a ‘painful but necessary step’.
The company is looking to effectively manage costs and restructure its operations in response to a highly competitive industry.
In an email addressed to Grab employees, Tan said that the layoffs are a necessary measure for the ride-hailing and food delivery platform operator to maintain its competitiveness in the future.
“We must adapt to the environment in which we operate. 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." he added.
Grab CEO also mentioned that the key objective of the layoffs was to allow the company to reorganise itself to move faster, work smarter and rebalance its resources.
Grab will make a severance payment of half a month of every six months of completed service, or based on local statutory guidelines, whichever is higher. The affected employees will receive medical insurance coverage until the end of this year, career transition, repatriation support and development support, among other measures.
Grab reported strong revenue growth and narrowed losses for 2022 on the back of a recovery in mobility demand. In February, the company stated it was bringing forward its target to the fourth quarter of 2023, half a year before its previous guidance. Even without layoffs, the company is likely to reach breakeven this year on group-adjusted earnings before interest, taxes, depreciation, and amortization.