news

Shopee Is Said To Be Carrying Out 'Mass Layoffs' Affecting Employees In Southeast Asia

Shopee is not the only multinational company that is laying off its employees as recession looms.

Cover image via VOI & The Business Times

Subscribe to our Telegram channel for our latest stories and breaking news.

Sea Group's e-commerce arm Shopee is said to be implementing "mass layoffs" as it tries to find its feet in the global market

Citing sources, DealStreetAsia reported that the layoffs have taken place in Shopee offices globally, particularly in Southeast Asia, including Indonesia, Thailand, and Vietnam.

ShopeePay and ShopeeFood — its payment and food delivery businesses, respectively — are not spared from layoffs.

In Thailand, two sources revealed that half of the teams in the aforementioned businesses are affected by the job cuts.

Shopee employees were informed about the company's downsizing plan in a town hall on Monday, 13 June.

It is understood that the affected employees were notified via email.

One source told DealStreetAsia that the email was said to have been managed in an off-handed manner, with the company asking staff to return home and await further notice of termination.

Image via euronews

Separately, Shopee's group president Chris Feng is said to have sent a memo announcing the layoffs on Monday

CNA sighted the memo and reported that cuts made in the teams were meant to "optimise our operations in certain segments and markets".

"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," read the memo.

"This is to ensure that, as a business, we remain in the best possible position to continue scaling sustainably and, ultimately, to win."

As of publishing time, the extent of the job cuts and the number of employees affected cannot be ascertained.

Shopee did not immediately reply to our request for a comment. 

Image via Hiredly

Prior to the move, Shopee has shut down its operation in India, laying off 300 of its employees

Marketing-Interactive reported that Shopee officially ceased its operation on 29 March and the withdrawal from India came after the government banned popular gaming app Free Fire. The game was developed by Garena, a sister company under Shopee's parent company.

India believes that user data of the gaming app was being sent to servers in China, thus, allowing the data to be "mined, collated, analysed, and profiled", reported Reuters.

It is learnt that its operation in France was ceased on 6 March and its early-stage pilot in Spain will also be shut down by 17 June.

The Singapore-based company is also present in Taiwan, Brazil, Mexico, Chile, and Colombia.

Image via VIR

DealStreetAsia reported that Shopee's business is still losing money

However, the e-commerce company is able to see a 71.3% year-on-year increase in orders to USD1.9 billion (about RM4.1 billion) in the first quarter of 2022, while gross merchandise value rose 38.7% to USD17.4 billion (about RM76.9 billion).

As for its parent company, Sea Group's first-quarter 2022 financials reflected a 64.4% year-on-year increase in Generally Accepted Accounting Principles (GAAP) revenue at USD2.9 billion (about RM12.8 billion).

Its gross profits soared 81.3% to USD1.2 billion (about RM5.3 billion) over the same period.

Shopee is not the only multinational company that is downsizing.

The Straits Times reported on Monday that Tesla Singapore country manager Christopher Bousigues has been laid off as part of global job cuts that chief executive officer Elon Musk has warned about in recent weeks over worries about a coming recession.

Musk said he has a "super bad feeling" about the economy, hence, he decided to cut about 10% of salaried staff at the electric carmaker, Reuters reported earlier this month.

Image via NDTV

Crunchbase News curated a list of tech companies that are going through downsizing. Netflix is said to be slashing off 2% of its workforce, while BlockFi is cutting 20% of its employees.

Layoffs are a typical course of action in a recession, and many observers predict that it is inevitable.

In August last year, Bloomberg ranked Shopee's parent company founder Forrest Li the second richest man in Singapore:

Catch up on the latest trending stories on SAYS: