Singaporean multinational ride-hailing and food delivery company, Grab, has plans to execute cost-cutting measures to weather through undetermined economic situation - this was stated in a memo by the chief executive, according to Reuters.
According to the memo, the measures comprise freeze on a majority of hires and senior managers’ salaries and a cut in travel and expense budgets. Grab’s CEO, Anthony Tan, added in the memo that these decisions were difficult to make, but they were made to aid Grab to “get leaner and fitter, as [Grab] accelerate even faster towards sustainable profitable growth”. “More so than ever, all Grabbers need to adopt a frugal and prudent mindset as we prepare for 2023.”
In November, it was reported that Grab increased it 2022 revenue forecast and that the firm broke three quarters sooner from its expectations with a narrower adjusted operating loss.
Tan added that Southeast Asia will be affected from rising costs and interest rates, as well as the “consequent effects on growth” and said that the new measures "will also help us avert knee-jerk reactions that may interrupt our plans down the road". The firm has been trying to reduce the losses by directing its efforts on higher-paying riders and lessening costs on incentives.
The memo also said that the firm would "freeze the majority of current open job requisitions which are not in offer stage" and there will be a mandatory approval for filling up of key positions, the ineligibility of specific senior positions’ salaries in impending reviews, and a 20% travel and expenses budget cut. Tan also said that Grab has been frugal with its finances in the past two years by streamlining certain businesses, thinning out incentives, and making fewer hires. These measurements will help the firm reach its profitability goals quicker.
A spokesperson confirmed the news with a statement: "We have been scrutinising our costs and are taking proactive steps to prepare ourselves for uncertainty in 2023. We are committed to executing our plans towards sustainable, profitable growth."
On a similar note, Grab Indonesia decided to discontinue its cloud services, officially on 19 December 2022. Grab Indonesia's chief communications officer, Mayang Schreiber told MARKETING-INTERACTIVE that GrabKitchen has witnessed an inconsistent growth and a shift to an asset-light business model during its four years of operation.
This decision is said to impact less than 20 employees and merchant partners and the company will provide benefits to its affected employees. This includes disbursement of the remaining leave days, goodwill payment, notice payment, extended health insurance as well as a mental and emotional health support programme. Meanwhile, its merchant partners will see rent waiver fees until 19 December 2022, a token of appreciation of up to 60% of their monthly gross revenue, and fulfilment of all contractual obligations.
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