Grab, the Singapore-based decacorn, has made the difficult decision to initiate another round of layoffs, affecting over 1,000 employees and resulting in plummeting stocks.
Stocks plummet
Following the recent layoff announcement, Grab’s stock reportedly experienced a significant decline on the Nasdaq exchange, falling by 0.58% to reach US$ 3.42.
Grab’s decision to undertake a substantial round of layoffs reflects its commitment to long-term competitiveness and adaptability in a rapidly changing business landscape.
The company aims to optimize its operations, achieve sustainable profitability, and navigate the challenges presented by technological advancements and intense market competition.
Reason behind the action
Anthony Tan, Co-founder and CEO of Grab Group, emphasized the responsibility to explain the reasons and context behind this decision, highlighting the company’s focus on long-term sustainability and the need to adapt to the rapidly changing business environment.
Grab clarified that the large-scale layoffs were not a shortcut to profitability. Over the past few years, the company has consistently managed costs across all operational areas, driving platform efficiency.
As a result, their profits have been increasing each quarter since Q1 2022. Anthony Tan emphasized that while achieving profitability is important, it is just one step in Grab’s broader journey.
Navigating innovative strategies
Anthony Tan acknowledged that the business landscape is rapidly evolving, with technologies such as generative artificial intelligence (AI) advancing at a rapid pace.Â
Increased capital costs have directly impacted the competitive landscape, necessitating fundamental changes in Grab’s operational model and cost structure to build long-term competitive advantages.
In light of these dynamics, Grab intends to strategically realign its business to enhance agility, cost-effectiveness, and resource allocation across its portfolio.
The company aims to merge business scale with nimble execution, striking a balance that aligns with its long-term strategy.
This comprehensive restructuring effort marks the largest workforce reduction since the onset of the COVID-19 pandemic.
Anthony Tan acknowledged the painful nature of this restructuring process but emphasized its necessity to ensure Grab’s trajectory toward a sustainable future.
It is worth noting that Grab had previously downsized its workforce by 360 employees or 5% of its total workforce in 2020, mainly due to the economic impact of the pandemic.
However, Grab has also faced intense competition in the ride-hailing and food delivery industries in Southeast Asia.
