Super App Grab Freezes Hiring and Salaries

Singapore’s Grab Holdings wants to cut costs for its ridesharing app/food delivery service.

A report Thursday (Dec. 15) by Reuters outlines the cost-cutting measures, which come amid ongoing struggles for the delivery sector.

The Reuters report says Grab will pause most hiring, institute salary freezes for upper-level management and reduce costs for travel and expenses, per a memo from Co-founder and CEO Anthony Tan that was seen by the news outlet.

Reached for comment by PYMNTS, a Grab spokesperson confirmed the contents of the memo.

“We have been scrutinizing our costs and are taking proactive steps to prepare ourselves for uncertainty in 2023,” the spokesperson said. “We are committed to executing our plans towards sustainable, profitable growth.”

The news follows reports from September that the super app had been looking to reduce spending on its path to breaking even. Grab, which operates in 480 cities across eight countries in Southeast Asia, went public in 2021 but hasn’t reported profitability.

The company — which had 8,834 employees at the end of last year — had previously slowed hiring. Speaking to The Wall Street Journal this summer, Chief Financial Officer Peter Oey said Grab was also examining spending on professional fees, real estate, cloud computing, and marketing, telling the newspaper that “everything is on the table for us.”

During an earnings call last month, Grab said it was looking to expand its grocery offerings to drive adoption across its markets.

“For non-food deliveries, we are building a portfolio approach towards our grocery segment,” Tan told investors. “In some markets like Malaysia, where we found a fit with our acquisition of Jaya Grocer, we can offer an end-to-end grocery retail experience within our app. In other markets, we are exploring partnerships.”

This year has seen a great deal of upheaval at delivery services, from quick-grocery services to food-delivery apps like DoorDash.

DoorDash announced last month it was cutting 1,250 jobs, or 14% of its global workforce, a move CEO Tony Xu said was designed to lower operating expenses which, “if left unabated, would continue to outgrow our revenue.”

And with a nod to the broader macroeconomic climate, Xu wrote, “Our business has been more resilient than other eCommerce companies, but we too are not immune to the external challenges and growth has tapered vs our pandemic growth rate.”