Thursday, 21 September 2023

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Grab Holdings to cut 11% of workforce amid strategic reorganisation efforts

SINGAPORE — Southeast Asia’s foremost ride-hailing and food delivery application, Grab Holdings, is set to reduce its workforce by 11%, laying off about 1,000 employees, according to a letter sent by CEO Anthony Tan to staff late Tuesday (20 Jun).

This move, the most significant job cut since the onset of the pandemic, is driven by the need to regulate costs and ensure affordable, long-term services.

The letter, which was seen by Reuters, includes Tan emphasizing that these cuts were not a hasty measure taken to achieve profitability. Instead, they form a part of a critical strategic reorganisation designed to adapt to the current business climate.

“Technology such as generative AI (Artificial Intelligence) is evolving at breakneck speed. The cost of capital has risen, directly impacting the competitive landscape,” he stated.

Despite the layoffs, Tan reassured that Grab has maintained a handle on costs and is on track to achieve its group adjusted EBITDA breakeven goal this year. The chief executive emphasized the necessity to merge their substantial scale with nimble execution and cost leadership. This will ensure the company can “sustainably offer even more affordable services and deepen our penetration of the masses.”

The “superapp”, founded in 2012, operates in eight Southeast Asian countries, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. It offers a comprehensive range of services including deliveries, rides, and financial services.

In an attempt to soften the impact of the job cuts, Tan outlined measures that would be undertaken to support the affected employees. The provisions will include a severance package of half a month’s pay for every six months of completed service or as per local statutory guidelines, whichever is higher.

Additionally, employees will receive a goodwill payment based on “forgone target bonus and equity”, the value of which will be determined by Grab.

The firm also promised to provide career transition and development aid, which includes free one-year access to LinkedIn Premium and LinkedIn Learning, plus professional coaching sessions.

Bloomberg had previously reported that Grab was preparing for its largest round of layoffs since the pandemic hit, as it faces escalating competition in ride-hailing and meal delivery across Southeast Asia.

It noted that the job reductions, which are set to surpass the 2020 layoffs of 5% or approximately 360 employees, are due to be announced this week.

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