Grab, the dominant ride-hailing and food-delivery app in Southeast Asia, has announced it will lay off 1,000 employees, or 11 percent of its workforce.
CEO Anthony Tan, who founded the company in Malaysia in 2012, explained in a letter to employees on Tuesday that the layoffs were necessary to control costs and to keep up with the rapid evolution of the industry and technology.
Tan wrote in the letter, “I want to be clear that we are not doing this as a shortcut to profitability.”
The restructuring was described as a “painful but necessary step.”
Grab was founded in Malaysia in 2012 as a taxi-booking app before becoming Southeast Asia’s largest ride-hailing company and expanding into financial services such as digital payments.
It operates in eight countries in Southeast Asia, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
The reductions are similar to actions taken by the Indonesian tech company GoTo, which also provides transportation, e-commerce, and financial services.
It laid off 12 percent of its workforce in 2022 and 600 more employees in March.
Grab disclosed a quarterly loss of $250 million in May, but first-quarter revenue increased by 130.3% year-over-year to $525 million.
Even with the reductions, the company is on schedule to break even this year, according to Tan.
Approximately 5% of Grab’s workforce was laid off in response to the pandemic in 2020, when 360 individuals were let go. According to its most recent annual report, the company employed 11,934 people by the end of 2022.
In December, Tan informed employees that the company would halt the majority of hiring and salary increases for senior managers, as well as reduce travel and expense allocations.
Gran went public in the United States in 2021, with an initial market capitalization of $39.9 billion.
Its shares are currently trading at approximately $3.40 per share, compared to $13 when trading first began.