Deliveroo cuts staff, Grab pushing no-pay leave to slash costs

Singapore

TECH firms Deliveroo and Grab are trimming costs by cutting staff and getting workers to go on no-pay leave, as the novel coronavirus outbreak continues to batter their businesses.

Deliveroo is laying off a quarter of its employees in Singapore amid the downturn. This comes after its general manager in Singapore, Siddharth Shanker, left the company to pursue other opportunities; The Business Times (BT) understands his departure is unrelated to Covid-19.

A total of 20 out of 80 Singapore staff will be affected by the headcount reduction, part of a global cut that will hit more than 300 workers in several countries. Some employees will be put on furlough.

The compensation package offered to retrenched employees comprises a minimum of 12 weeks' salary, inclusive of notice-period pay, sources said.

Deliveroo is also offering third-party support to help the affected staff find work. Opportunities for alternative roles within the company will be available, BT understands.

"Like so many others, Deliveroo has had to examine how to overcome the challenges we all face, as well as ensure we are in the strongest position possible following the crisis. This requires us to look at how we operate in order to reduce long-term costs," a Deliveroo spokesperson told BT in a statement.

Separately, the spokesperson confirmed that Mr Shanker, a former Uber executive, has left after three years with the company.

Growth and marketing director Sarah Tan stepped in as interim general manager in early April amid the stress test that the food-delivery firm is undergoing - triggered by the surge in demand for delivery services amid Singapore's partial lockdown during the Covid-19 pandemic.

BT also understands from sources that the Singapore office was going through significant restructuring even before the pandemic, though this is typical of a high-growth firm backed by venture capital.

Deliveroo confirmed to BT last November that there have been changes to the performance marketing function, resulting in some job cuts. BT understands that the head of performance marketing for the Asia-Pacific and Middle East, based in Singapore, was laid off as well.

Separately, Grab is urging its staff to take no-pay leave voluntarily as the downturn worsens.

The ride-hailing firm has also told its drivers that it may not be able to provide further financial support if Singapore's partial lockdown measures are extended past June 1.

Grab said it has dug deep into remaining resources to fund an extension of financial assistance for its drivers as transport rides continue to plunge by double-digit percentages.

Andrew Chan, head of transport for Singapore, told drivers in an update that it has moved funds from other benefit programmes (such as rewards, birthdays and cancellation compensation) and relied on voluntary donations from employees, which have been matched dollar-for-dollar by the company.

But the firm warned that it might have reached the end of its rope for financial assistance.

"No one can be sure how long the situation will last, but we are preparing for a long and difficult path ahead," he said.

In the meantime, Grab is also looking at ways to create earnings opportunities for drivers, such as allowing them to take on delivery jobs.

As revenues dwindle, senior Grab leaders have taken a pay cut of up to 20 per cent, as announced on March 30.