Grab plans biggest round of job cuts since pandemic: Sources
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The layoffs are set to be announced as soon as this week.
PHOTO: LIANHE ZAOBAO FILE
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SINGAPORE - Grab Holdings is preparing its biggest round of layoffs since the Covid-19 pandemic, as the Internet company faces stiffening competition in ride hailing and meal delivery across South-east Asia.
The reductions may be announced as soon as this week and are likely to surpass a 2020 round that shrank staff by 5 per cent,
While Singapore-based Grab leads South-east Asia’s ride-hailing and delivery markets, it has yet to reach profitability as it spends on growth, and competition from rivals such as Indonesia’s GoTo Group weighs on prices.
Shares of Grab have slumped about 70 per cent since its stock market debut in New York in late 2021, even as it has reduced its losses and pledged to report a profit on an adjusted basis by the final quarter of 2023.
The cuts suggest Grab is succumbing to investor pressure for faster cost reduction.
Grab has been slower to slash expenses than its regional competitors. As GoTo and Singapore’s Sea eliminated thousands of jobs in 2022, Grab refrained from mass layoffs. It added more than 3,000 staff in 2022, largely because of its acquisition of supermarket chain Jaya Grocer, taking its total headcount north of 11,000.
A Grab spokesman declined to comment.
Grab is also facing potentially slowing growth as customers grapple with a higher rate of inflation and rising interest rates.
While the company reported a narrower quarterly loss in May, it said its gross merchandise value grew just 3 per cent in the three months through March. That is down from 24 per cent for the full year 2022. User growth also slowed as competitors lured customers with promotions and lower prices.
Grab’s adjusted losses before interest, taxes, depreciation and amortisation in the first quarter narrowed to US$66 million (S$88.5 million), and analysts are predicting that its losses will continue to shrink.
On a net income basis, it is still far from reaching profitability. In the first quarter, its net loss narrowed to US$244 million from US$423 million a year earlier. BLOOMBERG
