Sea Limited – the parent company of Shopee – appears to be in dire straits, pulling out of markets, slashing costs and salaries!
Parent Company Of Shopee Slashes Costs + Salaries!
Singapore-based Sea Limited – Shopee’s parent company – appears to be in dire straits, pulling out of markets, slashing costs and salaries!
In March 2022, Shopee shut down its France operations less than 6 months after kicking off its “European conquest” in October 2021.
Then in early September 2022, Shopee exited Argentina, and shut down its local operations in Chile, Colombia and Mexico. Sea Limited’s Garena gaming unit also laid off hundreds of employees in Shanghai.
Today (September 15, 2022), Bloomberg reported that Sea Limited’s top management staff will forgo their salaries, and the company will tighten its expenses.
In a 1,000-word internal memo to Sea Limited staff, CEO Forrest Li said that the leadership team will not take any cash compensation “until the company reaches self-sufficiency”, as well as these additional measures :
- business travel is restricted to economy class flights,
- travel meal expenses are limited to US$30 a day,
- hotel stays for business trips are limited to US$150 a night
- reimbursements for meals and entertainment bills will be removed
Sea Limited + Shopee Have Been Struggling In 2022
Li noted that Sea Limited has been struggling against rising interest rates, accelerating inflation, and a volatile market – conditions that he foresees will likely persist into the medium term.
He stressed that the company’s primary objective for the next 12-18 months will be to achieve positive cashflow as soon as possible.
With investors fleeing for ‘safe haven’ investments, we do not anticipate being able to raise funds in the market.
The only way for us to free ourselves from relying on external capital is to become self-sufficient, generating enough cash for all our own needs and projects.
Li’s comments mirrors the “tough times” concerns recently expressed by HUAWEI CEO Ren Zhengfe.
Read more : HUAWEI CEO Ren Zhengfei Warns Of Tough Times!
Sea Limited saw its market value soar to more than US$200 billion in October 2021, but its share prices tumbled 85%, reducing its market value to just US$27 billion.
Last month, Sea announced that its net loss in the second quarter of 2022 widened to US$931.20 million from US$433.7 million last year. Its total adjusted loss before interest, taxes, depreciation and amortisation for that quarter also jumped to US$506.3 minion from US$24.1 million.
This was despite a 29% increase in total revenue to US$2.9 billion, from US$2.3 billion in the second quarter of last year.
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