On Tuesday, Singapore-based Grab Holdings is preparing its biggest round of job cuts since the pandemic, Bloomberg News reported. The report added that the layoffs are set to be announced as soon as this week and are likely to surpass a 2020 round that shrank staff by about 5%, or about 360 employees. Those layoffs were blamed on the economic impact of the pandemic. Grabs media relations team declined to comment on the report.
The ride-hailing and food delivery app, which leads the region’s markets but is not profitable, has been under pressure to cut costs since its stock market debut last year. It has frozen hiring, rolled back pay rises for senior managers, and trimmed travel and expense budgets. But it has been slower to slash expenses than regional competitors such as GoTo and Singapore-based Sea Ltd, the parent of Shopee.
Shares in the company have slumped 70% since its New York stock market listing in late 2021, despite it cutting earnings-draining incentives and pledging to return to profitability by the final quarter of this year.
The company has stepped up efforts to lower its operating costs, and its chief executive told staff in December the firm would freeze most hiring, freeze raises for senior management, and cut travel and expense budgets. It also expanded a program called GrabExpress Car that allows more of its vehicle drivers to make deliveries by car instead of motorbike.
Grab’s revenue has been dragged down by the slowdown in its core ride-hailing business since the pandemic began. The company’s food-delivery service has seen an uptick, but more is needed to offset the drop in ride-hailing, which accounts for most of its revenue.
But the COVID-19 crisis has accelerated the adoption of digital payments in many of Grab’s markets. It has rolled out a suite of services for merchants to accept cashless payments, including the mobile wallet GrabPay and remittance services GrabMoney. It has also launched a more straightforward process to help merchants register their businesses online and submit documents like licenses and certifications, making it easier for them to use the service.
The company is also partnering with local governments to help make on-demand deliveries more efficient. In Indonesia, it worked with the government to expand a program called GrabExpress Car, which allows more of its vehicles to be used for deliveries. And it has been adapting technology initially created for ride-pooling to allow its drivers to plan pickups and deliveries more efficiently. It has also been working with the Indonesian government to provide more vaccines for its people. The Indonesian government has lifted its lockdown order, but it remains a highly-volatile market. The company has a market cap of $15 billion and is one of Asia’s most valued tech start-ups.
