Grab has announced a significant workforce reduction, cutting 1,000 jobs or 11% of its employees, the company's largest layoffs to date. At the end of 2022, Grab employed approximately 11,934 staff, including individuals from its acquisition of Malaysian supermarket chain, Jaya Grocer.
While the company promised in 2022 not to undertake mass layoffs in a weak market, CEO Anthony Tan justified this latest decision by claiming it was a strategic reorganisation to adapt to the changing business environment, and manage costs.
In a letter seen by Reuters and addressed to Grab employees, Tan frames the layoffs as a necessary step for the company's long-term viability.
"Change has never been this fast. Technology such as generative AI (artificial intelligence) is evolving at breakneck speed," said Tan. "The cost of capital has increased, directly impacting the competitive landscape."
However, Tan did not address the true implications and consequences of the job cuts.
He also emphasised the importance of combining scale, agile execution, and cost leadership to offer affordable services and penetrate the masses.
Grab's move follows a similar pattern in the industry. Indonesian tech firm GoTo (which offers similar services) implemented strict cost-cutting measures last year, including a workforce reduction of 12%. GoTo then proceeded to lay off an additional 600 staff in March.
Grab also announced co-founder Tan Hooi Ling's departure from operating roles at the company in May 2023. Tan Hooi Ling will transition to an advisory role, along with her relinquishment of the board directorship.
CEO Tan claimed then that Tan Hooi Ling's succession plan had been in place for some time, indicating that she would not be immediately replaced. The nominating committee will consider candidates to supplement the board later this year.
Grab reported a quarterly loss of $250 million in May, despite a 130.3% increase in revenue in the first quarter of this year, reaching $525 million. The company issued an optimistic forecast for full-year revenue in 2023 and expedited its profitability timeline in February.
Campaign has reached out to Grab for a statement on the above.