Despite expressing positive revenue projections for 2023 and accelerating its profitability timeline in February, Grab is now planning a fresh round of layoffs.
Grab Holdings, a Singapore-based ride-hailing and food delivery company, is gearing up for its largest round of layoffs since the pandemic, according to a report by Bloomberg on Tuesday.
Sources familiar with the matter stated that the company would officially announce the planned job cuts this week, which is expected to surpass the previous 5% reduction in 2020, affecting up to 360 employees. At the time, Grab attributed the downsizing to the economic repercussions of the pandemic.
Despite expressing positive revenue projections for 2023 and accelerating its profitability timeline in February, the ride-hailing giant Grab is now planning a fresh round of layoffs. The company predicted its revenue for this year to range between $2.20 billion and $2.30 billion.
Fresh Layoffs by Grab: A Change of Heart
Last September, the Singapore-based firm stated that it had no plans for extensive layoffs despite the challenging market conditions. However, in December of the same year, Grab had a change of heart, contradicting its earlier statement.
In a letter to employees, Grab’s CEO Anthony Tan informed the staff of a freeze on most hiring, pay raises for senior managers, and implemented cost-saving measures such as reduced travel and expense budgets.
According to Grab’s latest annual report, the company had a workforce of 11,934 employees as of the end of 2022. However, it remains unclear how many of these staff members will be impacted by the upcoming job cuts.
As one of the leading Asian tech companies, Grab went public in 2021 through a merger with a special purpose acquisition company (SPAC) called Altimeter. The transaction raised a gross profit of $4.5 billion, making it the biggest public US market debut by a Southeast Asian firm.
Since then, the company has expanded its operations across Thailand and Indonesia, providing customers with a wide range of services, including ride-hailing and food delivery.
Not the First
With its planned downsizing, Grab joins a number of tech companies that have been forced to slash their workforce due to poor market sentiments.
In January, e-commerce giant Amazon announced its plans to reduce its global headcount. The company revealed its intention to wind down three UK warehouses and seven delivery stations, impacting more than 1,200 workers. Shortly after, Amazon conducted a second round of layoffs, affecting 9,000 employees.
That same month, another tech firm, Salesforce, also joined the trend, dismissing 10% of its staff. While sharing his reflections on the series of events leading up to this crucial moment, the company’s CEO Marc Benioff blamed the job cuts on overstaffing and the post-pandemic effects.
Other companies, such as Microsoft Corporation and Alphabet, Google’s parent company, have also implemented workforce reductions. The planned layoffs at Microsoft affected up to 10,000 employees from its cloud service business. On the other hand, Alphabet dismissed around 6% of its global workforce, impacting up to 12,000 workers.
These layoffs reflect the challenges technology companies face, grappling with economic uncertainties and changing market dynamics brought on by the pandemic.