DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5
Retail

Singapore's Grab Cuts 1,000 Jobs To Stay Competitive

By Reuters
Share this article
Singapore's Grab Cuts 1,000 Jobs To Stay Competitive

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, 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.

'Breakneck Speed'

"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.

ADVERTISEMENT

The 'superapp', founded in 2012, offers deliveries, rides and financial services in eight Southeast Asian countries, including Indonesia, Malaysia, the 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.

Go-To Cost Cutting

The layoffs follow a similar move last year by Indonesian tech firm GoTo, which offers rides, e-commerce and financial services. It has undergone strict cost-cutting, including axing 12% of its workforce in 2022. It laid off a further 600 staff in March.

Its incoming CEO is planning to head the firm only temporarily and quit after improving profitability, sources told Reuters last week.

ADVERTISEMENT

First-Quarter Revenue

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 U.S.-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.

ADVERTISEMENT

Read More: Delivery Firm Grab To Buy Malaysia's Jaya Grocer

News by Reuters, edited by ESM – your source for the latest technology news. Click subscribe to sign up to ESM: European Supermarket Magazine.

Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.