Grab fires more than 1,000 employees, CEO admits pain

Grab is a Singapore-based company listed on the Nasdaq stock exchange in the US. As of the end of 2022, the group had 9,942 employees, not including 2,000 workers at the Jaya Grocer grocery chain in Malaysia that the company acquired early last year.

This is Grab's first round of layoffs since 2020, when the company cut about 360 jobs during the Covid-19 pandemic.

CEO Anthony Tan said the ride-hailing and food delivery company is “on track” to break even on its EBITDA (earnings before interest, taxes, depreciation, and amortization) target. But on a net income basis, the Southeast Asian tech giant is still far from turning a profit. In the first three months of the year, Grab reported a net loss of $250 million, down 43% from the same period last year.

Founded in 2012, Grab started out as a ride-hailing service, before expanding into food delivery and financial services, growing into a giant in eight regional markets, thanks in part to generous incentives for users and drivers to sign up.

However, after going public in December 2021, the company faced widespread selling pressure as investors turned away from high-growth but loss-making brands due to rising interest rates and the economic downturn. To date, Grab shares have lost about 70% of their value.

Grab responded by pivoting from continually expanding its “super app” services to focusing on improving its core transportation and ride-hailing business.

Unlike regional rivals such as Sea (Singapore) and GoTo (Indonesia), which have cut thousands of jobs since last year, Grab has maintained a policy of limiting layoffs and has only slowed down hiring and streamlined some functions.

In December last year, the tech giant implemented a series of cost-saving measures, including freezing hiring and senior management salaries, and cutting its travel budget.

CEO Tan said the company needed to make “fundamental changes” to its operating model. “The goal is to strategically reorganize the company to be more agile, work smarter and rebalance its portfolio to align with its long-term strategy.”

Therefore, "restructuring is a painful but necessary step to put Grab on the right track for the long-term future" - the group's head affirmed.

(According to NikkeiAsia)

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