The ride-hailing market in Southeast Asia, encompassing online transportation and food delivery services, reached around USD13 billion (RM60.4 billion) in 2021. However, it is projected to witness significant growth and is expected to reach USD42 billion (RM195 billion) by 2025.
Ride-hailing services have become indispensable in the daily lives of people across Southeast Asia. A survey conducted during a specific period revealed that over half of the respondents (53%) had utilized ride-hailing apps. Vietnam (69%) and Singapore (64%) were the countries with the highest percentage of users. Grab, the leading player in the industry, holds the largest market share in Malaysia.
SCMP reports that Grab, the leading ride-hailing and food delivery app in Southeast Asia, will reduce its workforce by 1,000 employees or 11% of its total workforce, according to the CEO Anthony Tan. The decision aims to effectively manage costs and ensure the long-term affordability of services. In a letter addressed to employees, Tan stated that the job cuts were not merely a shortcut to achieving profitability, but rather a strategic reorganisation to adapt to the evolving business environment.
Tan highlighted the rapid pace of change, with technologies like generative AI advancing at remarkable speeds. He also mentioned the increased cost of capital, which directly affects the competitive landscape. The CEO emphasised the need for Grab to combine its scale with agile execution and cost leadership to sustainably offer more affordable services and expand its reach among the masses.
Tan further stated that Grab had been effectively managing costs even before the layoffs and is on track to achieve its target for group adjusted EBITDA (earnings before interest, taxes, depreciation, and amortisation) break-even this year.
Grab’s previous job cuts was in 2020, laying off 360 employees in response to the pandemic’s impact. As of the end of 2022, the company had a total staff of 11,934, including approximately 2,000 employees from its acquisition of a grocery chain.
In September 2022, Grab stated that it had no plans for mass layoffs despite a weak market. However, in December, the CEO informed employees about measures such as freezing most hiring, senior manager pay raises, and cutting travel and expense budgets.
