https://mothership.sg/2023/06/grab-layoff-1000-jobs/
Singapore-based tech company Grab will cut 1,000 jobs or 11 per cent of its workforce, announced its chief executive officer (CEO) Anthony Tan in an employee letter on the evening of Jun. 20, reported Reuters.
As of Dec. 31, 2022, the company had 11,934 full-time employees globally, according to its 2022 annual report.
The latest layoff is the company's biggest since 2020 when Grab retrenched some 360 employees, or around 5 per cent of its global headcount at the time, due to economic uncertainties imposed by the pandemic.
In response to Mothership's queries, a Grab spokesperson referred to the Reuters report above and did not comment further.
Details of the staff letter
According to a screenshot of Tan's letter posted by an unaffected Grab employee on Xiaohongshu, the CEO said the company is not conducting the layoff "as a shortcut to profitability".
Grab had been "consistent in managing costs tightly in all areas" of its operations and on improving platform efficiency over the past couple of years, allowing its bottom line to improve every quarter since the first quarter of 2022, said Tan.
Instead, the layoff serves as a strategic reorganisation for the company to adapt to the business environment, which Tan described to be rapidly changing due to emerging technology, such as generative artificial intelligence (AI), reported Reuters.
As the cost of capital has gone up, Grab must combine its scale with "nimble execution and cost leadership" so that the company can "sustainably offer even more affordable services" and deepen its penetration of the masses, said Tan.
The stock market had responded favourably to Tan's announcement as Grab's shares were up 4.7 per cent premarket following his letter to employees, according to Reuters.
However, the price corrected subsequently.
Grab appeared on track to profitability
Prior to his latest announcement, Tan wrote in an internal memo in December 2022 that Grab would be implementing a series of cost-saving measures, including salary freezes for senior managers and cuts in travel and expense budgets, so that the company could accelerate even faster towards "sustainable, profitable growth".These measures appeared to be effective, as the company announced in a press releasein February 2023 that it would be able to bring forward its group breakeven timeline, on an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) basis, from the second half of 2024 to Q4 2023.
Three months later, Grab further boosted its stakeholders' confidence by sharing in its first quarter 2023 report that it was able to narrow its loss in the quarter to US$250 million (S$335 million), as compared to US$435 million (S$583.9 million) in the first quarter of 2022.
Ongoing tech layoffs
Grab is not the only tech company that has downsized its workforce in recent months.In November 2022, Gojek's parent company, GoTo, announced that it would be slashing around 1,300 jobs or 12 per cent of its workforce, citing the need for the company to make adjustments to navigate the challenging global macroeconomic conditions.
Four months later, the Indonesian tech giant said it would be axing another 600 jobs to streamline the organisation and boost the company's profitability.
More recently, Facebook's parent company, Meta, kicked off its second round of layoffs, which would reduce its team size by around 10,000 people globally.
