In an effort to address costs and streamline operations in a competitive market, the CEO of Singapore-based Grab Holdings announced on Tuesday that the company will be reducing its workforce by over 1,000 employees. This move aims to facilitate organisational restructuring and adapt to the evolving business landscape.

CEO Anthony Tan expressed in an internal email to the staff that the layoffs are a "painful but crucial measure" that the ride-hailing and food delivery app operator, Grab, must undertake in order to ensure future competitiveness.

“The primary goal of this exercise is to strategically reorganise ourselves, so that we can move faster, work smarter, and rebalance our resources across our portfolio in line with our longer term strategies,” said Tan, reported CNBC. 

Since the challenges posed by the Covid-19 pandemic in 2020, this round of layoffs marks the largest workforce reduction undertaken by the group, surpassing the previous instance where 360 jobs were cut.

The CEO emphasised that the reduction in jobs is not a means to achieve immediate profitability, but rather a strategic move that will empower Grab to navigate the evolving business landscape and effectively embrace the rapid advancements in artificial intelligence.

According to Tan, Grab will offer severance pay equivalent to half a month for every six months of completed service, or in accordance with local statutory guidelines, whichever is greater. Additionally, the laid-off employees will receive medical insurance coverage until the end of the year, assistance with repatriation if necessary, and support for career transition and development, among various other measures.

Following Grab's Chief Operating Officer, Alex Hungate's statement to Reuters in September, where he indicated that the company does not anticipate implementing widespread layoffs despite the prevailing economic challenges, this announcement marks a notable development. Hungate emphasized that Grab exercises caution and prudence when it comes to any hiring decisions.

During the pandemic, significant tech companies in the United States, such as Amazon and Meta, experienced a surge in hiring due to increased business opportunities resulting from lockdown measures. However, as business conditions reverted to or approached pre-pandemic levels, many of these companies later conducted mass layoffs, resulting in the termination of thousands of employees.

Grab reported robust revenue growth and reduced losses for the year 2022, attributing it to a recovery in mobility demand. The recent announcement of layoffs by Grab adds to the series of employee reductions observed in major tech companies in Southeast Asia.