Grab to implement cost cuts, cites uncertain macroeconomic situation- CEO in memo
SINGAPORE – Grab Holdings Ltd , Southeast Asia’s biggest ride-hailing and food delivery firm, is rolling out cost-cutting measures to cope with an uncertain macroeconomic situation, the Singapore-based company’s chief executive told staff in a memo.
The measures include a freeze on most hirings, salary freezes for senior managers and cuts in travel and expense budgets, according to the memo, whose contents were confirmed by a company spokesperson.
“None of these decisions were easy, but are meant to help us get leaner and fitter, as we accelerate even faster towards sustainable, profitable growth,” CEO Anthony Tan said in the memo, which was sent to the staff on Wednesday and was viewed by Reuters. “More so than ever, all Grabbers need to adopt a frugal and prudent mindset as we prepare for 2023.”
Last month, Grab raised its 2022 revenue forecast, reported a narrower adjusted operating loss and said its food and grocery delivery business broke even three quarters ahead of the company’s expectations.
Tan said in the memo that Southeast Asia has not, and will not, be spared from rising prices and interest rates, and the consequent effects on growth.
Grab’s new measures “will also help us avert knee-jerk reactions that may interrupt our plans down the road,” he said.
Decade-old Grab, a household name in eight Southeast Asian countries, has been trying to stem losses by focusing on higher-paying customers and lowering spending on incentives. Grab, which operates in 480 cities in eight countries, had about 8,800 staff at the end of 2021.
In September, Grab’s chief operating officer, Alex Hungate, told Reuters that the company did not envision having to undertake mass layoffs as some rivals, including Uber Inc have done. Instead, Hungate said, the company would selectively hire, while reining in its financial-services ambitions.
The memo circulated on Wednesday said Grab would “freeze the majority of current open job requisitions which are not in offer stage.” Tan wrote that requests to backfill and fill critical roles would need to be approved.
Certain leaders at the company would not be eligible for raises in their upcoming reviews, while the travel and expense budget will be reduced by another 20 percent from the last guidance, according to the memo.
Grab has more than 5 million registered drivers and more than 2 million merchants on its platform. It caught global attention in 2018 when it acquired Uber’s Southeast Asian business after a costly five-year battle.
Tan said the company has been cautious with how it has spent money over the past two years, streamlining some businesses, tapering down incentives as well as slowing down hiring. These measures, Tan said, had helped Grab get closer to its profitability goals.
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