On Tuesday, Southeast Asian ride-hailing and payments firm Grab said that it would lay off more than 300 employees or slightly fewer than 5% of its employees. This is due to the impact of the novel coronavirus. In a letter to Grab employees, co-founder and CEO Anthony Tan made the announcement. It is the latest setback to major backer SoftBank Group Corp.
Grab is Southeast Asia’s most valuable startup with a valuation of $14 billion. Similar to other travel-related companies including Uber, Oyo, Lyft, and Airbnb, its demand has been hit hard by the pandemic. According to people with knowledge of the matter informed the staff of the cuts at a town-hall meeting. Earlier the company had asked its employees to take voluntary unpaid leave.
Other businesses, Grab operates in include digital financial services and deliveries. These services are currently reallocating resources because the demand for stay-at-home orders has increased during the pandemic.
Tan wrote, “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. Despite all this, we recognize that we still have to become leaner as an organization to tackle the challenges of the post-pandemic economy.”
“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.
Laid-off employees will receive severance pay along with a waiver of annual cliffs for equity vesting, enhanced separation payment, medical insurance coverage till the year-end.