In order to pare down costs and ensure long-term growth, Singapore ride-hailing firm Grab Holdings yesterday, June 20, announced it will let 11 per cent of its workforce go, cutting over 1,000 jobs - its biggest layoff since the pandemic. Grab Philippines will be affected by the job cuts but the local subsidiary cannot provide further details, such as the number of employees to be laid off, Grab Public Relations Manager Arvi P. Lopez told Manila Bulletin. Grab implemented its first round of layoffs in 2020, reducing its workforce by 5 percent, letting go of 360 employees. However, the undisclosed number of Philippine-based employees affected at that time were office-based, not driver-partners. In his letter sent to employees late Tuesday, Grab Group CEO and Co-Founder Anthony Tan specified that the 1,000 job cuts were not a “shortcut to profitability” but part of a fundamental restructuring of its operating model and costs, a “painful but necessary step” for long-term growth.
"Our bottom line has improved every quarter since the first quarter of 2022. With or without this exercise, we’re on track to hit Group Adjusted EBITDA breakeven this year," according to Tan.
“The primary goal of this exercise is to strategically reorganize ourselves, so that we can move faster, work smarter, and rebalance our resources across our portfolio in line with our longer term strategies,” he explained.
"We must adapt to the environment in which we operate," the CEO maintained. "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." Grab promised to provide financial, professional and medical support to workers who will be laid off This includes a severance payment of half a month for every 6 months of completed service, or based on local statutory guidelines, whichever is higher. In goodwill, Grab will also pay an ex-gratia amount based on forgone target bonus and equity, encash unused accrued annual leave and unused GrabFlex credits. The company will also provide extended medical insurance coverage until the end of this year, where possible, maternity and paternity leave encashment, completion bonus for those who are required to provide transition support, career transition and development support as well as well-being and repatriation support plus the option to keep pre-assigned laptops.