Grab, the $14 billion Southeast Asian ride-hailing startup, announced hundreds of job losses on Tuesday (June 16) as the impact of COVID-19 continues to take its toll.
Reuters reported the company will lay off more than 300 employees. It’s the latest setback for the company’s major investor, SoftBank Group Corp., the Japanese global conglomerate holding company headquartered in Tokyo.
The pandemic has wreaked havoc on the ride-hailing industry with layoffs at Uber and Lyft. The impact in Southeast Asia has been severe. Last week, 11 drivers for rival Gojek told Reuters their incomes have been cut by more than half during the coronavirus pandemic.
News of the Grab staff cuts was delivered in a town-hall meeting, sources told the news service.
In a note from Grab CEO Anthony Tan obtained by Reuters, he said the company would cut just under 5 percent of its workforce.
The Singapore-based company, which provides service in eight countries, did not face capital constraints and would be “sunsetting non-core projects, consolidating teams and pivoting to focus on deliveries,” a spokeswoman told Reuters.
Grab has $3 billion in reserves, according to a source.
The layoffs are the latest restructuring at a SoftBank investment.
“The company (Grab) has been in growth mode for so many years in many verticals and it is necessary for it to make an adjustment to be more focused,” Jianggan Li, from Singapore-based tech venture consultancy Momentum Works, told Reuters. “With sufficient capital in the bank account and eased competitive pressure, it should really focus on building the core services well to achieve profitability.”
Late last month, PYMNTS reported Uber in India planned to lay off 600 workers amid a severe dropoff in the demand for its services. The move, part of a survival strategy amid the pandemic, will reduce Uber’s global workforce by 23 percent.
In April, Lyft, the San Francisco-based ridesharing company, laid off 17 percent of its workforce and imposed salary reductions for executives for 90 days. The company said it will lay off 982 employees and furlough an additional 288 to trim operating costs due to the COVID-19 pandemic.
But Didi Chuxing Technology Co., China’s largest ride-hailing company, appears to be an outlier.
Last week, its CEO said business was returning to pre-pandemic levels. Cheng Wei said requests for rides have surpassed the 30 million-a-day mark. That’s the most orders it has seen since the Chinese government shut down most of the country’s economy earlier this year to combat COVID-19, Wei added.