Grab To Slash Staff And Accelerate Profitability‍

The largest ride-hailing and delivery company in Southeast Asia, Grab Holdings Ltd., said it would cut expenditures in other areas as well as headcount in an effort to turn a profit earlier than anticipated.

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According to Chief Financial Officer Peter Oey, "We're looking at every area to make sure that we're optimized in our business." on Thursday. "Across the organization, we've used zero-based budgeting on a lot of line items."

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This includes reducing staff levels this year, which, according to him, will result in a slower increase in corporate costs in 2023, as well as reducing investment in some of the company's more recent ventures, such as nonbank financial services like consumer credit and merchant insurance. In terms of margin improvement and cost structure reduction in the non-bank business, we are seeing some pretty excellent traction, according to Mr. Oey.

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Mr. Oey said after Grab, a Singapore-based company, informed investors that it will now aim to achieve positive adjusted earnings before interest, taxes, depreciation, and amortization in the fourth quarter of 2023 rather than the second half of 2024 as originally anticipated. Grab reported an adjusted Ebitda loss of $111 million in the fourth quarter of 2022, down from $305 million the year prior.

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The expedited timescale for profitability coincides with strategy moves being made by Southeast Asian internet companies to prioritize profitability over expansion. Competitor GoTo Group accelerated its profitability goals last week by one year, while online retailer Sea Ltd. reduced staff and shut down operations in various areas to reduce expenses.

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According to Mr. Oey, Grab also intends to reduce discretionary spending, which includes its cloud costs, a significant cost for tech companies. He predicted that this year's cloud spending would decline by 10%–20%.

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The company's digital-bank sector, a crucial development area carefully followed by analysts and projected to deliver lucrative returns, is one area that will continue to get significant investment when it launches digital banks in Singapore, Indonesia, and Malaysia this year. The enterprise was described by Mr. Oey as a "critically vital investment" for Grab.

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We'll keep making sure to invest in the banks, he assured.

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