The reason why Grab suddenly laid off more than 1,000 employees

By mid-2022, Grab’s regional rivals such as Sea Group (the parent company of Shopee) and GoTo Group (the parent company of Gojek) have both experienced thousands of job cuts. However, Grab Technology Group still maintains a policy of limiting layoffs and only decelerating recruitment, as well as streamlining some functions.

In September 2022, Alex Hungate – Grab’s Operations Director stated, the company is not in this trend. This leader also emphasized that the company is always cautious in recruiting activities and has not seen any difficulties to stop recruiting or reduce the number of employees.

The stance of not firing employees was reiterated by Grab CEO and co-founder Anthony Tan in a memo to employees in December 2022. However, in this memo, Grab said that it is suspending hiring for non-essential positions and suspending salary increases for senior management positions.

In June this year, Grab announced to cut more than 1,000 employees. This is part of the company’s efforts to manage funds and stay competitive. Specifically, in a letter to employees posted on the website, Grab CEO Anthony Tan affirmed that the restructuring is a difficult but necessary step. Mr. Tan said that technologies such as artificial intelligence (AI) are developing at breakneck speed. The cost of capital has increased, directly affecting the competitive landscape.

Grab’s CEO also emphasized that the main goal of this decision is to strategically reorganize the company, so that it can go faster, work smarter, and rebalance resources in its portfolio. investments to align with long-term strategies. Grab is on track to break even this year without needing to lay off employees. In 2020, Grab cut 360 employees, or about 5% of its full-time workforce, due to the impact of the COVID-19 pandemic.

Anthony Tan also confirmed that the ride-hailing and food delivery company was still “on track” and denied that the plan to lay off employees was to quickly achieve profits. This leader believes that, with or without workforce adjustment, the company is still on track to break even with adjusted EBITDA this year.

Grab’s adjusted EBITDA profit has improved for five consecutive quarters. However, gross merchandise value (GMV) in the first quarter of this year began to show signs of stagnation, forcing the company to find ways to increase GMV if it wanted to break even.

“To make the most of these opportunities, we had to combine scale with rapid, cost-effective deployment to be able to offer more affordable services and deep penetration. into the masses in a sustainable way,” affirmed Mr. Anthony Tan in a message to Grab employees.