Grab, the leading ride-hailing and food-delivery app in Southeast Asia, headquartered in Singapore, has announced a workforce reduction of 1,000 employees, which accounts for approximately 11 percent of its total workforce.
Anthony Tan, the Chief Executive Officer and founder of Grab, addressed the company's employees in a letter on Tuesday, explaining that the job cuts were necessary to effectively manage costs. Tan acknowledged the rapid pace of change in the industry and technology and emphasized that the restructuring was not merely a shortcut to profitability. He described the decision as a painful yet essential step for the company.
Originally launched in Malaysia in 2012 as a taxi-booking app, Grab has since evolved into Southeast Asia's largest ride-hailing firm and expanded its services to include financial solutions like digital payments. Presently, Grab operates in eight countries across Southeast Asia, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
These layoffs mirror similar actions taken by GoTo, an Indonesian technology firm that offers rides, e-commerce, and financial services. GoTo had dismissed 12 percent of its workforce in 2022 and an additional 600 employees in March.
In the previous quarter, Grab reported a loss of $250 million. However, the company disclosed that its revenue in the first quarter of this year experienced a substantial increase of 130.3 percent, reaching $525 million compared to the same period the previous year.
Despite the layoffs, Tan assured the company that Grab remains on track to achieve profitability this year. The job cuts mark the second time Grab has implemented such measures, following the layoff of 360 employees, approximately 5 percent of its workforce at the time, in 2020 in response to the pandemic's impact. According to Grab's most recent annual report, the company had 11,934 employees by the end of 2022.
In December of the same year, Tan informed the staff about various cost-saving measures, including a freeze on hiring and pay raises for senior managers, as well as reductions in travel and expense budgets.
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