Singapore-based Grab, Southeast Asia’s leading ride-hailing and food-delivery app, has announced it will fire 1,000 people, or 11 percent of its workforce.

Chief executive Anthony Tan, who founded the company in Malaysia in 2012, told staff in a letter on Tuesday that the job cuts were necessary to manage costs and noted the rapid pace of change in the industry and technology.

“I want to be clear that we are not doing this as a shortcut to profitability,” Tan wrote in the letter.

He called the “restructuring” a “painful but necessary step”.

Grab launched in 2012 as a taxi-booking app in Malaysia before becoming Southeast Asia’s biggest ride-hailing firm and expanding into financial services like digital payments. It operates in eight Southeast Asian countries, including Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

The layoffs follow similar moves by Indonesian tech firm GoTo, which also offers rides, e-commerce and financial services. It fired 12 percent of its workforce in 2022 and sacked a further 600 staff in March.

In May, Grab reported a quarterly loss of $250m but said revenue in the first quarter of this year rose by 130.3 percent to $525m compared with a year ago.

The company is on track to break even this year even without the layoffs, Tan said.

Grab’s last job cuts were in 2020, when 360 people – representing about 5 percent of the workforce at the time – were laid off in response to the impact of the pandemic. The company had 11,934 staff at the end of 2022, according to its most recent annual report.

In December, Tan told staff the company was freezing most hiring and pay rises for senior managers, as well as cutting travel and expense budgets.

Grab was listed in the United States in 2021, in a debut that valued the company at $39.6 bn

Its shares are now trading at about $3.40 each, compared with $13 when they began trading.

Source: Agencies