Online shopping portal Shopee, the e-commerce arm of Singapore-based Sea Ltd., has announced massive layoffs at its Southeast Asian operations and overseas markets.
It was the first major round of layoffs in shopping and food delivery amid heightened market volatility that has also hit other tech companies in the region.
In an email to employees, the division’s chief executive, Chris Feng, said the company plans to spread staff across its entire division in Southeast Asia, including ShopeeFood and ShopeePay. Bloomberg News.
The memo did not specify which Southeast Asian countries would be affected by the layoffs or how many were planned. Shopee has branches in Indonesia, Thailand, Vietnam, Malaysia and the Philippines, with regional headquarters in Singapore.
The layoffs will also extend to Shopee’s teams in Mexico, Argentina, Chile and Spain, the report said, noting that Shopee will exit Spain entirely by the end of June, a few months after India and France. It now plans to continue to focus on its core markets in Southeast Asia and Brazil.
Cut costs as growth slows
Sea Ltd. is under increasing pressure to cut costs as the growth of its main e-commerce business emerges from pandemic-era highs. While mobile gaming has proven to be more resilient, the company has lost about $160 billion in market value since its October highs as investors begin to examine its long-term trajectory.
“Given the heightened uncertainty in the overall economy, we believe it is prudent to make certain difficult but important adjustments to improve our operational efficiency and focus our resources,” Feng said in an email to employees. , the layoffs are to ensure the business remains in the “best possible position” to continue to scale sustainably.
The firings come after Sea Ltd. revised its full-year outlook for e-commerce sales, its main source of revenue, to $8.5 billion to $9.1 billion from its previous guidance of $8.9 billion to $9.1 billion. The company also posted bigger losses in the first three months as expenses soared.
Shopee’s “Redundancy and Inefficiency”
Some analysts aren’t surprised by the reorganization of Shopee, which is said to employ 48,000 people worldwide.
“Shopee, like many other companies, has accumulated a lot of layoffs and inefficiencies during its high growth phase,” said Li Jianggan, founder and CEO of Momentum Works, a Singapore-based business development company.
“It appears Shopee’s strategy is to scale first and only address inefficiencies when inefficiencies become an issue. Now, with inflation driving a high probability of a U.S. recession via rate hikes, the growth agenda must give way to the free cash flow agenda, Inefficiency has really become an issue,” he added.
Online shopping portal Shopee, the e-commerce arm of Singapore-based Sea Ltd., has announced massive layoffs at its Southeast Asian operations and overseas markets. It was the first major round of layoffs in shopping and food delivery amid heightened market volatility that has also hit other tech companies in the region. The division’s chief executive, Chris Fung, said in an email to employees seen by Bloomberg News that the company plans to have employees across the division, including ShopeeFood and ShopeePay in Southeast Asia. The memo did not specify which Southeast Asian countries would…
Online shopping portal Shopee, the e-commerce arm of Singapore-based Sea Ltd., has announced massive layoffs at its Southeast Asian operations and overseas markets.
It was the first major round of layoffs in shopping and food delivery amid heightened market volatility that has also hit other tech companies in the region.
In an email to employees, the division’s chief executive, Chris Feng, said the company plans to spread staff across its entire division in Southeast Asia, including ShopeeFood and ShopeePay. Bloomberg News.
The memo did not specify which Southeast Asian countries would be affected by the layoffs or how many were planned. Shopee has branches in Indonesia, Thailand, Vietnam, Malaysia and the Philippines, with regional headquarters in Singapore.
The layoffs will also extend to Shopee’s teams in Mexico, Argentina, Chile and Spain, the report said, noting that Shopee will exit Spain entirely by the end of June, a few months after India and France. It now plans to continue to focus on its core markets in Southeast Asia and Brazil.
Cut costs as growth slows
Sea Ltd. is under increasing pressure to cut costs as the growth of its main e-commerce business emerges from pandemic-era highs. While mobile gaming has proven to be more resilient, the company has lost about $160 billion in market value since its October highs as investors begin to examine its long-term trajectory.
“Given the heightened uncertainty in the overall economy, we believe it is prudent to make certain difficult but important adjustments to improve our operational efficiency and focus our resources,” Feng said in an email to employees. , the layoffs are to ensure the business remains in the “best possible position” to continue to scale sustainably.
The firings come after Sea Ltd. revised its full-year outlook for e-commerce sales, its main source of revenue, to $8.5 billion to $9.1 billion from its previous guidance of $8.9 billion to $9.1 billion. The company also posted bigger losses in the first three months as expenses soared.
Shopee’s “Redundancy and Inefficiency”
Some analysts aren’t surprised by the reorganization of Shopee, which is said to employ 48,000 people worldwide.
“Shopee, like many other companies, has accumulated a lot of layoffs and inefficiencies during its high growth phase,” said Li Jianggan, founder and CEO of Momentum Works, a Singapore-based business development company.
“It appears Shopee’s strategy is to scale first and only address inefficiencies when inefficiencies become an issue. Now, with inflation driving a high probability of a U.S. recession via rate hikes, the growth agenda must give way to the free cash flow agenda, Inefficiency has really become an issue,” he added.
