Grab to cut 5 per cent of employees in another setback for backer SoftBank as Covid-19 impacts economy

Grab Holdings, the leading ride-hailing company in Southeast Asia, said it will cut 360 employees, or just under 5 per cent of its total, as it reduces expenses to deal with an economic downturn and slow recovery from the coronavirus pandemic.

Chief Executive Officer Anthony Tan said the virus has had a broad impact on businesses and the economy, and it is taking steps to adjust to the challenges. In addition to the job cuts, the Singapore-based company plans to eliminate some non-core projects, consolidate functions and reallocate staff to newer initiatives, like delivery.

“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,” Tan said in a blog post. “Over the past few months, we reviewed all costs, cut back on discretionary spending, and implemented pay cuts for senior management. In spite of all this, we recognise that we still have to become leaner as an organisation to tackle the challenges of the post-pandemic economy.”

Backed by SoftBank Group Corp., Grab had become the most valuable start-up in Southeast Asia as it expanded beyond ride-hailing into food delivery and other services. In February, Grab raised more than US$850 million to fund its push into financial services in the region.

The cuts are the latest sign of troubles among the portfolio companies of SoftBank. Founder Masayoshi Son has been among the most enthusiastic backers of ride-hailing companies, investing about US$3 billion in Grab and billions more in Uber Technologies and China’s Didi Chuxing.

Tan told employees about the lay-offs at a virtual town hall Tuesday morning, after initially asking employees to go on voluntary no-pay leave to avoid such cuts. It is not planning to shut any offices, according to a spokesperson.