Joining the streak of tech layoffs, Singapore’s ride-hailing company Grab is snipping approximately 1,000 jobs, or almost 11 per cent of its workforce. This is the biggest round of job cuts by the Southeast Asian tech giant since the 2020 when it laid off around 360 employees.
It is Grab’s largest mass layoff since the pandemic emerged, when the company laid off employees due to economic affliction caused by COVID-19. The layoff happened subsequent to Grab’s announcement in last September that it would be looking for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to break even this year.
The company’s CEO Anthony Tan said the layoffs were not a “shortcut to profitability” rather a part of fundamental changes to the company’s operating model and cost structure. He described the decision to lay off around 1,000 employees as a ‘painful but necessary step’.
In a letter to Grab employees, Tan wrote, “I want to be clear that we are not doing this as a shortcut to profitability. Over the past couple of years we’ve been consistent in managing costs tightly in all areas of our operations and on improving platform efficiency.”
“We must adapt to the environment in which we operate. Change has never been this fast. Technology such as Generative AI is evolving at breakneck speed. The cost of capital has gone up, directly impacting the competitive landscape.” Tan added.
Grab’s CEO stated that the main objective of the layoffs was to enable the company to reorganise itself to move speedily, work smarter and make constructive use of its resources.
As per the Associated Press, Grab began as a taxi-hailing service in Malaysia in 2012 and later stretched its business to include ride-hailing, food delivery and financial services in eight Southeast Asian countries, such as— Indonesia, Malaysia and the Philippines. It established itself as the largest ride-hailing company in Southeast Asia after acquiring Uber’s business in the region in 2018.
It was reported by AFP that many Southeast Asian tech companies have been snipping jobs to focus on profitability. Grab’s competitor in Indonesia had laid off 1,300 staff, or about 12 per cent of its workforce, in 2022 and 600 in March this year in a new round of layoffs. Singapore-based gaming company Sea Ltd laid off about 7,000 workers in 2022.
The year 2023 has so far proved to be a specifically hard time for the tech industry as layoffs have reached unprecedented levels. According to “layoff.fyi,” a website that tracks job cuts, 696 tech companies have laid off workers this year. As of May 18, approximately 197,985 tech workers have lost their jobs, and the number is expected to increase further.
The layoff tracker also highlights that the number of layoffs in 2023 has already surpassed the figures from the previous year. In 2022, a total of 1,056 tech companies decided to reduce their workforce, affecting approximately 164,000 employees throughout the year.
It must be noted that several other big tech giants such as Meta have slacked off as many as 21,000 employees. Amazon also eliminated workers in multiple rounds of layoffs and it has so far removed 27,000 people. Google, which is one of the biggest tech behemoths in the world, handed over pink slips to its 12,000 employees. The good thing is, most of the tech companies that reduced workforce in the past few months, have mentioned to give severance pay to laid-off employees.
