Shopee parent Sea’s CEO tells staff worst is over for company
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Sea has made the changes it needs to deliver profits over the long haul, billionaire founder Forrest Li said in a memo to staff.
PHOTO: THE BUSINESS TIMES
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SINGAPORE – Sea Limited has made the changes it needs to deliver profits over the long haul, billionaire founder Forrest Li said in a memo to staff, assuring workers who had survived months of steep job cuts
The Asian Internet giant’s first-ever quarterly net profit marks a turning point for the company, the chief executive officer said in a recent internal memo seen by Bloomberg News.
The company made painful decisions to adapt quickly and has a more stable footing with fewer inefficiencies, Mr Li said in his 700-word missive.
“I want to assure you that, assuming no major shift in our external environment, our large-scale changes are complete, and we do not foresee further major changes,” Mr Li said.
But he warned that the company still needs to prove that it can sustain a profit. “The world will be watching to see whether this quarter’s result is just a momentary blip or the start of a long-term trend,” he said. “Our job is not yet done.”
Sea, the largest of South-east Asia’s Internet firms and briefly the world’s best-performing stock, is emerging from a painful 2022 in a changed world of rising interest rates, accelerating inflation and geopolitical tensions.
The company has lost about US$160 billion (S$215 billion) of market value since a peak in October 2021 on questions about its money-making prospects.
In recent months, the company cut thousands of jobs, froze salaries and slashed more than US$700 million from quarterly sales and marketing expenses to convince investors of its profit-making ability. It cut about 500 jobs at e-commerce unit Shopee in Indonesia this month, just days after the company reported a surprise quarterly profit
In a stark about-face from years of prioritising global expansion, the company also shuttered operations in India and some European and Latin American markets to trim costs and reach positive cash flows.
“As a company, it is our first time going through a crisis of this magnitude,” Mr Li said. “Taking major action early in this crisis – much earlier than most in our industry – was painful, but has put us in a stronger position today.” BLOOMBERG
