Shopee’s parent company and local company Sea will be freezing salaries and paying lower bonuses this year, to prepare for a worsening economy in 2023. This comes after a wave of retrenchments across online shopping platform Shopee and Sea’s gaming unit Garena.
Their Singapore Premier League football club Lion City Sailor’s CEO Chew Chun-Liang will also be stepping down.
Here are the details.
Focus on Profitability After Major Losses in 2022
Sea founder Forrest Li told employees they will need to focus on profitability in 2023. This comes after a turbulent 2022, where Sea incurred major losses while also handling the economic downturn caused by the Russo-Ukraine war and rising inflation rates.
To prepare for an even more challenging economy in 2023, Sea will be freezing the salaries of those who haven’t been promoted. Employees will also receive lower bonuses this year-end.
“These are temporary but necessary measures to help us build toward a bigger, brighter future.”
Ironically, Sea’s shares dropped over 4% after this announcement was made.
Stepping Down from the Helm
Sea also announced that the CEO of Lion City Sailors, Mr Chew Chun-Liang, will step down at the end of December 2022. This marks about two years after he first took on this position.
Forrest Li commended Chew for serving the club “with distinction and a sincere spirit” which led the club to hit many milestones under his leadership. This includes claiming the championship in 2021, and opening a $10 million training centre on Mattar Road in July 2022.
“We respect Chun-Liang’s decision to leave the club, and we wish him nothing but the best in his future endeavours,” stated Li.
Retrenchments and Losses in 2022
In 2022, Sea and its companies like Garena and Shopee were met with major losses and a slew of retrenchments.
Sea suffered a 72% drop in share prices in 2022, which was exacerbated by government bans in India that struck a blow to Garena. Quarterly paying users for Garena have fallen by 39% in the last three months alone.
They reported a net loss of US$931 million in the second quarter, which was more than double the loss it made in the same period last year.
Sea fired about 10% of its workforce, or 7,000 employees, in the latter half of 2022. They also shut down several major projects surrounding blockchain and public cloud, and let go dozens of people.
After Garena reported a nearly US$1 billion loss in the last quarter, Sea started shutting down projects and laying off staff in the gaming arm.
In particular, the 30 to 40 staff at Booyah!, which is a gaming live stream and community app, were all let go with the decision that the app would no longer be updated.
Additionally, Shopee laid off dozens of workers across Southeast Asia, Mexico, and Latin America across June and September. They also rescinded several job offers, leading to iconic stories like that man whose job offer got rescinded when he had already moved his family to Singapore.
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