Impacting around 11% of the workforce, Singapore-based tech giant Grab will lay off over 1,000 employees, its CEO said Tuesday.

From Taxi-Booking App to Southeast Asia’s Biggest Tech Giant

Grab launched in 2012 as a taxi-booking app in Malaysia before becoming Southeast Asia’s biggest and expanding into financial services like digital payments.

Restructuring for Profitability

The company has been narrowing its losses and aims to break even by the end of this year.

“I want to be clear that we are not doing this as a shortcut to profitability,” CEO Anthony Tan wrote in a message to employees Tuesday.

A Painful but Necessary Step

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

“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,” the letter said, according to an excerpt posted on Grab’s website.

“The primary goal of this exercise is to strategically reorganize ourselves so that we can move faster, work smarter, and rebalance our resources across our portfolio in line with our longer-term strategies.”

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

Past Layoffs and Acquisition

Grab laid off 360 employees in 2020 – then about 5% of its full-time workforce – as the pandemic hit demand for its services.

In 2018, Grab cemented its position as Southeast Asia’s biggest ride-hailing firm when it bought Uber’s operations in the region, ending a bruising battle with its US-based rival.

Going Public and Plummeting Shares

The company went public on Wall Street in 2021 by merging with a special-purpose acquisition company, or SPAC.

The transaction was the largest-ever U.S. public market debut by a Southeast Asia company, Grab said and valued the company at $39.6 billion.

But its shares have plummeted since debuting at $13. They were selling at around $3.40 on Tuesday.

Focusing on Profitability

Southeast Asian technology firms have been slashing their workforce as they focus on profitability, including Singapore-based Sea Ltd which cut over 7,000 jobs last year and froze salaries and spending.

Grab’s Indonesian rival GoTo laid off 600 workers this year besides 1,300 jobs last year.