Grab announces its largest round of layoffs since the pandemic, eliminating 1,000 jobs

Singapore-based company Grab Holdings is undergoing a restructuring process that involves cutting over 1,000 jobs, according to its CEO’s statement on Tuesday. This move is aimed at managing costs and adapting to the competitive landscape in which the ride-hailing and food delivery app operator operates.

In an email sent to the company’s staff, CEO Anthony Tan emphasized the necessity of these layoffs as a “painful but necessary step” that will enable Grab to remain competitive in the future. Tan explained that the primary objective of this exercise is to strategically reorganize the company, allowing it to work faster and smarter while reallocating resources across its portfolio in line with its long-term strategies.

This is the largest round of layoffs that Grab has implemented since 2020, when the company reduced its workforce by 360 employees due to the challenges posed by the Covid-19 pandemic.

Tan also mentioned that even without these layoffs, Grab is on track to reach breakeven this year in terms of group adjusted earnings before interest, taxes, depreciation, and amortization. In fact, the company recently announced that it has moved its breakeven target forward to the fourth quarter of 2023, which is six months earlier than previously projected.

It is important to note that Tan emphasized that these job cuts are not simply a “shortcut to profitability,” but rather a necessary step for Grab to adapt to the rapidly evolving business environment, particularly with the emergence of artificial intelligence.

As part of the restructuring process, Grab will provide severance payment equivalent to half a month’s salary for every six months of completed service or based on local statutory guidelines, whichever amount is higher. Additionally, laid-off employees will receive medical insurance coverage until the end of the year, repatriation support, as well as career transition and development assistance.

It is worth noting that Grab’s decision to implement these layoffs comes after its COO, Alex Hungate, stated in September that the company did not anticipate conducting mass layoffs despite the economic challenges posed by the pandemic. Hungate specifically mentioned that Grab was cautious and selective in its hiring practices.

Interestingly, while major U.S. tech companies like Amazon and Meta experienced a surge in hiring during the pandemic due to increased demand, many of them later had to lay off thousands of workers as business conditions returned to pre-pandemic levels.

Grab, on the other hand, reported strong revenue growth and narrower losses for 2022, attributing the positive performance to the rebound in mobility demand.

This announcement from Grab is the latest in a series of layoffs among major tech companies in Southeast Asia. As an example, in March, Indonesia’s GoTo revealed its plans to lay off 600 employees in order to improve profitability, as reported by Reuters. Furthermore, Singapore-based Sea implemented over 7,000 job cuts in the last six months of 2022.