Singapore-based ride-hailing company, Grab recently announced that it will be laying off 360 employees or about 5% of its workforce. The decision was announced by company Co-founder and CEO Anthony Tan in an internal letter to employees.
However, putting speculations about more layoffs aside, a company spokesperson said that the company will not shut down any of its offices and won’t perform further layoffs this year.
Talking to TechCrunch, the spokesperson said, “We do not face capitalization issues. We conducted the layoffs to become a leaner and more efficient organization and we did this by sunsetting non-core projects, consolidating teams and pivoting to focus on deliveries. We remain laser-focused on adapting our core businesses of transport, deliveries, payments and financial services to address the challenges and opportunities of the new normal.”
The ride-hailing companies globally have been severely affected by the coronavirus pandemic. Like Grab, its rivals Uber, Lyft and Ola, all have laid off staff to conserve cash and resources. Grab is reportedly Southeast Asia’s largest ride-hailing platform. Grab also operated several other businesses including financial services and deliveries. The other two operations of the company, however, have witnessed a surge in business during the pandemic.
In the internal memo, Tan said, “Since February, we have seen the stark impact of COVID-19 on businesses globally, ours included. At the same time, it has become clear that the pandemic will likely result in a prolonged recession and we have to prepare for what may be a long recovery period.”
“Over the past few months, we have reviewed all costs, cut back on discretionary spending, and implemented pay cuts for senior management. In spite of all this, we recognize that we still have to become leaner as an organization in order to tackle the challenges of the post-pandemic economy.”
He added that Grab will sunset some “non-core projects,” consolidate functions and reduce team sizes. It is also reallocating more resources to its on-demand delivery verticals.
“We were able to save many jobs through this redeployment of resources and it helped limit the scope of the reduction exercise to just under 5 percent,” Tan wrote.
It is being said that the estranged employees will receive severance pay as well as enhanced separation payment. Along with it, the company is offering, a waiver of annual cliffs for equity vesting; medical insurance coverage until the end of the year; encashment of unused annual leave and GrabFlex credits; and, for expecting parents, encashment of their parental benefits, as of the last day of employment.
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