Grab to let go of 1,000 employees: Details announced on severance, goodwill payment, and more

"While important, our profitability milestone is only a step in a longer journey. Our focus is on what comes after," CEO Anthony Tan has shared.

Leading Singapore-based superapp, Grab, has decided to let go of 1,000 employees (who it terms as 'Grabbers'). This was announced in an email to all staff by Grab CEO, Anthony Tan, excerpts of which have since been shared by the organisation publicly.

In the email, Tan explained the rationale for the "difficult" decision as well as provided details on the retrenchment support being offered to the employees affected. The decision was announced after office hours on 20 June 2023 for as many of its locations as possible, in a bid to give employees the space and time to process the news privately.

Below is a summary of what has been communicated.

Saying that the job cuts are not being undertaken as "a shortcut to profitability", Tan noted that over the past couple of years, the company has been consistently managing costs tightly in all areas of operations and on improving platform efficiency. As a result, bottom line has improved every quarter since Q1 2022 - although the organisation is yet to hit profitability as of Q1 results announced for this year.

"While important, our profitability milestone is only a step in a longer journey. Our focus is on what comes after. We must adapt to the environment in which we operate. 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," Tan wrote.

As such, he laid out a path to leverage growth opportunities, combining scale with nimble execution and cost leadership, in order to provide more affordable services, deepen Grab's penetration of the masses, and serve its driver- and merchant-partners better.

These, he said, were the reasons for streamlining some focus areas in the past year.

He wrote: "Now, we believe fundamental step-changes in our operating model and cost structure are needed to build our competitive moat for the longer-term. 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.

"Restructuring thus emerged as a painful but necessary step, to set Grab on the correct trajectory towards our longer-term future."

Support for impacted Grabbers

Tan detailed the financial, professional, and medical support that is being offered to those impacted by the Grab layoffs:

• Severance payment of half a month for every six months of completed service, or based on local statutory guidelines, whichever is higher;
• Goodwill payment of an ex-gratia amount determined by Grab for forgone target bonus and equity;
• Encashment of unused accrued annual leave and unused GrabFlex credits;
• Extended medical insurance coverage until the end of this year, where possible, subject to local insurance terms;
• Maternity and paternity leave encashment for female Grabbers who are expecting and male Grabbers whose wife is expecting, as of the last date of employment;
• Completion bonus for those who are required to provide transition support;
• Career transition and development support in the form of free one-year access to LinkedIn Premium subscription and LinkedIn Learning, and access to sessions with a professional coach;
• Wellbeing support via the Grabber Assistance Programme until the end of this year;
• Repatriation support (for Grabbers on work passes); and
• Option to keep Grabbers' pre-assigned laptop.

While stating that "the decisions made have been weighed with great care and consideration with all our leaders", Tan thanked the outgoing staff: "To those who are leaving, we thank you so much for sharing your time and talent with us, and for all the impact you’ve made towards our mission. We will always be grateful for your contributions, and cherish the memories we’ve forged together as teammates."

This news comes just over a month after Grab reported its Q1 2023 results, which saw a loss of US$250mn. At the time, Peter Oey, Chief Financial Officer of Grab, had said: "We remain focused on driving cost efficiencies across our organisation and improving operating leverage."

Regional corporate costs for the quarter were reported to be US$216mn. Such costs are those that are not attributed to any of the business segments, and could include certain shared costs such as finance, accounting, tax, human resources, technology and legal costs. Regional corporate costs exclude share-based compensation expenses and capitalised software costs. 

Grab had added in the report: "Overall headcount across our core segments and corporate functions has fallen sequentially over the past two quarters. Management remains focused on driving cost efficiencies across our organization in order to further reduce regional corporate costs."

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Lead image / Grab Press Library