Grab is about to reveal the biggest round of employment layoffs in three years in Singapore. Anthony Tan, the company’s founder and CEO, announced on Tuesday, June 20, that as a calculated cost-cutting move, the ride-hailing and food delivery behemoth will be firing 1,000 of its around 12,000 workers. Tan made it clear that these layoffs are not a hurried attempt to turn a profit. Rather, he emphasized that for the previous two years, Grab has been dedicated to improving platform efficiency while upholding strict cost control throughout its operations. Since the first quarter of 2022, the financial performance has improved as a consequence of this methodical strategy.
Tan said, “I want to be clear that we are not doing this as a quick cut to profitability,” in a message that was posted on the business blog. We have increased platform efficacy over the last two years while continuing to strictly control costs in all facets of our business. This has increased our bottom line, beginning in Q1 2022.”
There are noticeably more layoffs in this round than in prior ones. In June 2020, Grab fired 300 employees, or around 5% of its staff, as the COVID-19 epidemic started to negatively affect the ride-hailing services’ revenue. After three years, the business is facing fresh difficulties like inflation and the world economic downturn. According to Grab’s quarterly statistics from last month, users were still having trouble with price hikes. Gross merchandise value (GMV) decreased by 4%, or 7% in constant currency, according to the firm, bringing the GMV to little less than $5 billion. But GMV per user either didn’t change or increased by a small 3%.
Grab declared in December of the previous year that it will stop hiring and impose a pay freeze in order to prepare for the uncertainty of 2023 in response to these continued difficulties. The food delivery industry is characterized by intense competition, which is the backdrop for these impending layoffs. Grub hub said last week that it would be reducing its workforce by 15%, which will affect about 400 people. Similarly, earlier this year, the British food delivery business Deliveroo let go of 9% of its staff. These layoffs are a reflection of larger market changes as customers grow less reliant on on-demand convenience services and become more cost sensitive.
The move by Grab to cut employees is a component of a larger plan to deal with the present state of the economy. Despite external challenges, the corporation strives to maintain growth and balance its operations. Even though these layoffs are a terrible move, their goal is to guarantee Grab’s long-term viability and capacity to keep offering its clients services.
In conclusion, Grab is getting ready to make a large number of layoffs in an effort to control expenses and adjust to a difficult economic climate. The company’s continued dedication to cost control and efficiency is highlighted in CEO Anthony Tan’s speech, and this has already improved financial performance. However, difficult choices are still required due to the competitive environment and financial constraints. Grab is committed to maintaining business operations and providing value to its users while it works through these obstacles.
