Grab Will Be Mass Layoffs, So The Largest After COVID-19

Illustration of Grab (Photo: dock. Antara)

The Grab Holding Ltd is reportedly preparing for the largest layoffs (PHK) since the COVID-19 pandemic. This is due to the increasingly fierce competition in online transportation services in Southeast Asia.

Launching Reuters, Jakarta, Tuesday, June 20, the online transportation application company will cut 1,000 jobs or 11 percent of its workforce.

This is according to a letter sent by employees received by reuters, where Grab CEO Anthony Tan said the employee cuts were the largest since the start of the COVID-19 pandemic. However, this is not a shortcut to seek profitability but a strategic reorganization to adapt to the business environment.

"Changes have never been as fast as this. Technology such as a generative AI (artificial intelligence) continues to grow at high speeds. Capital costs have also increased, of course, having an impact on the landscape of competition," Tan said in the letter.

He also said that the Grab scale must be combined with agile executions and cost management. Thus, Grab can offer more affordable services in a sustainable manner and deepen its market penetration.

Even without layoffs, continued Tan, Grab has managed costs and must achieve its target of reaching a break event point (BEP) from the group's EBITDA which is experiencing adjustments this year.

Looking at his finances, in May, Grab reported a quarterly loss of US$250 million. However, revenue in the first quarter of 2023 increased 130.3 percent to US$525 million compared to last year.

Meanwhile, regarding the movement of its shares, Grab rose 4.7 percent after Tan's announcement of staff. Previously, Grab's shares had risen 5.6 percent before the market opened because this issue had been circulating since a few days ago.

As is known, in 2020 Grab also laid off staff shrinking by 5 percent or about 360 employees. The company has 11,934 staff by the end of 2022, including about 2,000 from last year's grocery store chain acquisition, his latest annual report said.