Shopee cuts workforce across Southeast Asia

Online shopping portal Shopee, the e-commerce division of Singapore based Sea Ltd., has announced major job cuts across its Southeast Asian operations and also its overseas markets.

It is the first major round of redundancies in areas spanning over shopping and food delivery amid increasing market volatility which also hit other tech firms in the region.

The company plans to let employees go across the entire division, including ShopeeFood and ShopeePay, in Southeast Asia, Chris Feng, the unit’s chief executive, said in an email to employees seen by Bloomberg News.

The memo did not specify which Southeast Asian countries would be affected by the layoffs and how many are planned. Shopee has outposts in Indonesia, Thailand, Vietnam, Malaysia and the Philippines, with its regional headquarters in Singapore.

The cuts will also extend across Shopee’s teams in Mexico, Argentina, Chile and Spain, the report said, noting that Shopee will pull out of Spain completely as of the end of June after withdrawing from India and France after just a few months in the countries and now plans to stay focused on its core markets in Southeast Asia and Brazil.

Slashing costs as growth decelerates

Sea Ltd. faces increasing pressure to slash costs as growth in its main e-commerce business comes off a pandemic-era high. While mobile gaming has proven more resilient, the company has lost about $160 billion of its market value since an October high as investors begin to scrutinise 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 emphasised that the job cuts are to ensure that the business remains in the “best possible position” to continue scaling sustainably.

The dismissals 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 a wider loss for the first three months as expenses soared.

“Redundancies and inefficiencies” at Shopee

Some analysts are not so surprised about the restructuring at Shopee, which is said to employ 48,000 staff worldwide.

“Shopee, as many other companies, has accumulated a lot of redundancies and inefficiencies during its high growth phase,” Jianggan Li, founder and CEO of Singapore-based business development firm Momentum Works, said

“It seems that Shopee’s strategy was to achieve scale first, and only solve the inefficiencies when they become a problem. Now as inflation is driving the US to highly likely induce a recession by rate hikes, the growth agenda has to give way to the free cashflow agenda and inefficiencies have indeed become a problem,” he added.



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Online shopping portal Shopee, the e-commerce division of Singapore based Sea Ltd., has announced major job cuts across its Southeast Asian operations and also its overseas markets. It is the first major round of redundancies in areas spanning over shopping and food delivery amid increasing market volatility which also hit other tech firms in the region. The company plans to let employees go across the entire division, including ShopeeFood and ShopeePay, in Southeast Asia, Chris Feng, the unit’s chief executive, said in an email to employees seen by Bloomberg News. The memo did not specify which Southeast Asian countries would...

Online shopping portal Shopee, the e-commerce division of Singapore based Sea Ltd., has announced major job cuts across its Southeast Asian operations and also its overseas markets.

It is the first major round of redundancies in areas spanning over shopping and food delivery amid increasing market volatility which also hit other tech firms in the region.

The company plans to let employees go across the entire division, including ShopeeFood and ShopeePay, in Southeast Asia, Chris Feng, the unit’s chief executive, said in an email to employees seen by Bloomberg News.

The memo did not specify which Southeast Asian countries would be affected by the layoffs and how many are planned. Shopee has outposts in Indonesia, Thailand, Vietnam, Malaysia and the Philippines, with its regional headquarters in Singapore.

The cuts will also extend across Shopee’s teams in Mexico, Argentina, Chile and Spain, the report said, noting that Shopee will pull out of Spain completely as of the end of June after withdrawing from India and France after just a few months in the countries and now plans to stay focused on its core markets in Southeast Asia and Brazil.

Slashing costs as growth decelerates

Sea Ltd. faces increasing pressure to slash costs as growth in its main e-commerce business comes off a pandemic-era high. While mobile gaming has proven more resilient, the company has lost about $160 billion of its market value since an October high as investors begin to scrutinise 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 emphasised that the job cuts are to ensure that the business remains in the “best possible position” to continue scaling sustainably.

The dismissals 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 a wider loss for the first three months as expenses soared.

“Redundancies and inefficiencies” at Shopee

Some analysts are not so surprised about the restructuring at Shopee, which is said to employ 48,000 staff worldwide.

“Shopee, as many other companies, has accumulated a lot of redundancies and inefficiencies during its high growth phase,” Jianggan Li, founder and CEO of Singapore-based business development firm Momentum Works, said

“It seems that Shopee’s strategy was to achieve scale first, and only solve the inefficiencies when they become a problem. Now as inflation is driving the US to highly likely induce a recession by rate hikes, the growth agenda has to give way to the free cashflow agenda and inefficiencies have indeed become a problem,” he added.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

 

 

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