(June 14): Sea Ltd is making its first major job cuts in areas spanning shopping and food, joining other tech firms downsizing this year in anticipation of unprecedented market and economic volatility.
Southeast Asia’s largest tech firm plans to let employees go across its e-commerce division Shopee, Chris Feng, the unit’s chief executive, said in an email to employees seen by Bloomberg News. It will reduce headcount across its ShopeeFood and ShopeePay divisions in Southeast Asia. The cuts will also extend across its Mexico, Argentina, and Chile teams, as well as the cross-border team supporting Spain.
Sea faces increasing pressure to slash costs as growth in its main commerce business comes off a pandemic-era high. While mobile gaming has proven more resilient, the company has lost about US$160 billion of its market value since an October high, as investors begin to scrutinize its longer-term trajectory.
“Given elevated uncertainty in the broader economy, we believe that it is prudent to make certain difficult but important adjustments to enhance our operational efficiency and focus our resources,” Feng said in his email to staff. He emphasized that the job cuts are to ensure that the business remains in the “best possible position” to continue scaling sustainably.
Sea representatives weren’t immediately available to comment.
Consumers emerging from prolonged lockdowns are cutting back on online purchases, especially with the war in Ukraine and rising interest rates clouding the global economic outlook. More than 132,000 tech jobs have been cut since the start of the pandemic, according to tracking site Layoffs.fyi.
The dismissals come after Sea revised its full-year outlook for e-commerce sales, its main source of revenue, to US$8.5 billion to US$9.1 billion from its previous guidance of US$8.9 billion to US$9.1 billion. The company also posted a wider loss for the first three months as expenses soared.
The Singaporean giant is now gradually reducing its overseas footprint and periphery businesses, as competition takes a toll. That’s a stark shift from the e-commerce and gaming platform’s previous stance of continued spending for global growth.
“This reallocation of resources to further focus on our priorities will help us grow our business even better,” Feng said in his email. “While we need to continue to optimize our efficiency, we are also generally still growing and hiring as needed to support that growth.”
Shopee will pull out of Spain as of the end of June 17, it said in an announcement on its website. The company pulled out of India and France after just a few months in the countries, and plans to focus on core markets in Southeast Asia and Brazil.