HONG KONG (AP) — Singapore ride-hailing firm Grab Holdings said it is cutting over 1,000 jobs or 11% of its workforce to cut costs and keep the company competitive, in its biggest round of job cuts since the pandemic.
Grab CEO Anthony Tan said in a letter sent to employees late Tuesday that the job cuts were not a “shortcut to profitability” but part of a fundamental restructuring of its operating model and costs.
“The primary goal of this exercise is to strategically reorganize ourselves, so that we can move faster, work smarter, and rebalance our resources across our portfolio in line with our longer term strategies,” Tan said, describing the restructure as a “painful but necessary step” for the longer term.
Grab’s shares on NASDAQ were up more than 5% in premarket trading, but declined nearly 1.5% midday.
The Singapore-based company started out as a taxi-hailing service in Malaysia in 2012, before later expanding to ride-hailing, food delivery and financial services across eight countries in Southeast Asia, including Indonesia, Malaysia and the Philippines. In 2018, it acquired rival Uber’s Southeast Asian operations after years of price wars to carve out market share.
Grab has been slower than other technology firms in the region in slashing jobs. The company initially said last September that it had no plans for massive job cuts.
Last year, Singapore-based gaming and online retail firm Sea Ltd., axed 7000 jobs or about 10% of its workforce. Grab’s rival, Indonesian ride-hailing firm GoTo, had cut 12% of its workforce last year and cut another 600 jobs in March.
Although Grab reported a 130% rise in revenue to $525 million for its quarter ended March, it also clocked a loss of $250 million from the same time last year.
Grab is potentially grappling with slowing growth, amid higher inflation rates and costs of living, as well as stiff competition from rivals such as GoTo. Its gross merchandise value – which calculates the total dollar value of transactions by Grab users – rose just 3% for the quarter. Spending per user was down 4% compared to the same time last year.
In February, Grab brought forward its profitability goal, expecting to break even in the final quarter of 2023. It previously expected to turn profitable in the second half of 2024.