In a statement released earlier today, the company’s CEO Anthony Tan announced that around 5% of its office workforce (driver-partners are not affected)—about 360 employees—was being let go, giving the public a clearer idea of just how hard the ride-hailing industry has been hit by the health crisis.
“We understand this news will cause anxiety and dread. Please know that we did not come to this decision lightly,” Tan’s statement reads. “We tried everything possible to avoid this but had to accept that the difficult cuts we are making today are required, because millions depend on us for a living in this new normal.”
Tan attributes the need to cut jobs directly to COVID-19’s effect on its operations, adding the crisis will clearly lead to a recession and that the company is already preparing for its recovery.
“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,” Tan explains.
“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 recognize that we still have to become leaner as an organization in order to tackle the challenges of the post-pandemic economy.”
Tan also assured Grab employees that this will be the only organization-wide layoff for 2020, and shared details of the compensation those affected by the job cuts will receive. The latter includes medical insurance that will last until the end of 2020, as well as the option to keep their company laptops for personal use. You can read more details regarding this, as well as Tan’s statement in full, here.
“To the Grabbers who will be leaving us, each of you has made a lasting imprint on our region through your sacrifice, grit and determination. I am deeply grateful for your efforts and we are where we are today because of you. Thank you for sharing your talent and passion with us. Thank you for enriching the lives of Grabbers, our customers, and partners through your contributions. You will always be part of the Grab family.”
According to Grab Philippines, the company’s local operations will be affected by the layoffs. It is not, however, at liberty to share how many local employees will be part of the job cuts. Also, again, driver-partners are not affected.
Did you expect COVID-19’s impact on the ride-hailing industry to be this severe, or were you expecting worse?