Exclusive: Grab expects no big layoffs despite weak market

A person walks previous a Seize workplace in Singapore March 26, 2018. REUTERS/Edgar Su

SINGAPORE, Sept 25 (Reuters) – Seize , Southeast Asia’s greatest ride-hailing and meals supply agency, doesn’t envisage having to undertake mass layoffs as some rivals have completed, and is selectively hiring, whereas reining in its monetary service ambitions.

Chief Working Officer Alex Hungate mentioned that earlier within the 12 months, Seize had been frightened a few world recession and was “very cautious and considered about any hiring”, and consequently, it had not obtained to the “determined” level of a hiring freeze or mass layoffs.

“Round mid-year, we did some type of particular reorganisations, however I do know different firms have been doing mass layoffs, so we do not see ourselves in that class,” Hungate, 56, advised Reuters in his first interview since becoming a member of Singapore-based Seize Holdings Ltd in January.

The corporate was hiring for roles in knowledge science, mapping expertise and different specialised areas although each rent was a a lot greater resolution than it was, he mentioned.

“You wish to be sure that we’re conserving capital. The hurdle for making a rent has undoubtedly been raised.”

Decade-old Seize, a family identify in Southeast Asia, had about 8,800 workers on the finish of 2021. Like its rivals, it has benefited from a increase in meals companies through the COVID-19 pandemic, whereas ride-hailing suffered.

As economies open up, meals supply demand is softening whereas ride-hailing has but to totally get well. Tech valuations have additionally fallen dramatically and inflation, slower progress and rising rates of interest have emerged as dangers.

In current weeks, Southeast Asia’s largest e-commerce agency Shopee reduce jobs in varied nations and shut some abroad operations after guardian Sea (SE.N) reported widening losses and scrapped its annual e-commerce forecast. learn extra

Hungate, a veteran of the monetary companies, logistics and meals sectors, has spearheaded a push away from low-margin enterprise strains as Seize races to show worthwhile.

Second-quarter loss narrowed to $572 million from $801 million a 12 months earlier. However final month, it reduce its gross merchandise quantity outlook for the 12 months, blaming a powerful greenback and ebbing meals supply demand. learn extra

Final month, Seize mentioned it was shutting dozens of so-called darkish shops – distribution hubs for on-demand groceries and slowing the roll-out of its “cloud kitchen” centralised amenities for deliveries.

“The opposite space the place we have actually tightened our strategic intent is in monetary companies the place we have been rising funds, wallets and non-bank monetary lending fairly considerably off-platform and on our platform,” mentioned Hungate.

Seize reorganised its fintech unit this 12 months to give attention to extra profitable areas and Reuters reported on the exit of some senior executives.

‘HIGHER MARGINS’

Seize is now primarily focussing on promoting its lending merchandise and insurance coverage on its platform to retailers and drivers who usually repay from their revenue streams on the platform.

“As we make this shift, the enterprise combine will transfer in direction of increased margins,” mentioned Hungate.

Seize, which operates in 480 cities in eight nations, has greater than 5 million registered drivers and greater than two million retailers on its platform.

It caught world consideration in 2018 when it acquired Uber’s Southeast Asian enterprise after a pricey five-year battle.

Seize is betting on rising monetary companies by providing banking and different merchandise with accomplice Singapore Telecommunications (STEL.SI) in key markets.

It listed on the Nasdaq in December after a document $40 billion merger with a blank-check firm. learn extra

Hungate mentioned it was “good timing” for the corporate to look once more at the way it spends cash, given the elevated scrutiny of funds and the necessity to answer shareholders.

“Possibly we have been fortunate in a way that the self-discipline of being a public firm got here at simply the best time,” he mentioned, including that Seize’s $7.7 billion money liquidity meant it was among the finest capitalised business gamers in Southeast Asia.

Seize’s shares have tumbled about 60% this 12 months to offer it a market worth of $10.6 billion.

Reuters reported final month that Seize’s Indonesian rival GoTo (GOTO.JK) was searching for to lift about $1 billion via a convertible bond subject. learn extra

Hungate mentioned Seize would supply particulars of its progress in direction of profitability and different metrics at its first investor day on Tuesday.

Reporting by Anshuman Daga; Modifying by Robert Birsel

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