In a recent announcement, Grab Holdings, Southeast Asia’s leading ride-hailing and food delivery app based in Singapore, revealed its decision to cut 1,000 jobs, which accounts for approximately 11% of its workforce.
Grab’s CEO, Anthony Tan, emphasized the need for change in response to the fast-paced evolution of technology, citing generative AI (artificial intelligence) as a prime example.
As technology progresses at a breakneck speed, the cost of capital has risen, directly impacting Grab’s competitive landscape. Tan views this workforce reduction as a strategic realignment that enables the company to adapt to the ever-changing business environment.
According to Tan, Grab aims to combine its scale with nimble execution and cost leadership to provide sustainable, affordable services and penetrate the masses more effectively.
In a screenshot circulating online of Tan’s letter sent to the employees, he said that Grab is not doing this as a “shortcut to profitability” and that they have been “consistent in managing costs tightly in all areas” over the years.
Following the announcement of the job cuts, Grab’s stock saw a premarket surge of 4.7%, with earlier gains reaching as high as 5.6% following a Bloomberg News report on the matter.
Additionally, Grab’s strong revenue growth is evident, with a 130.3% increase in the first quarter of this year compared to the same period last year. In February, the company provided an optimistic revenue forecast for 2023 and accelerated its timeline for achieving profitability.
Grab’s reduction in workforce is not an isolated incident in the Southeast Asian tech industry. Indonesian tech firm GoTo undertook a similar cost-cutting measure in 2022, laying off 12% of its employees.
In March of the same year, GoTo further downsized its workforce by 600. While GoTo’s incoming CEO plans to lead the company temporarily and depart after improving profitability, Grab’s strategic reorganization aligns with its long-term vision for sustained growth.