Why is Shopee having massive layoffs?

Last updated on October 26th, 2022 at 01:06 pm

On Monday (September 19), the e-commerce behemoth Shopee announced more layoffs, the most recent in a string of actions taken in response to expanding losses and weaker sales growth.

This morning, the layoffs were communicated within the company during town hall meetings with the affected employees.

In response to questions regarding the layoffs that were announced on Monday, a representative for Shopee stated, “These changes are part of our ongoing efforts to optimize operating efficiency with the goal of reaching self-sufficiency across our business.” Shopee announced the layoffs.

“During this time of transition, we are providing our affected coworkers with support and assistance.”

More and more layoffs

Shopee and the Creative Media and Publishing Union (CMPU), which represents Shopee’s employees, have issued a joint statement in which they revealed that the two organizations have been communicating with one another about Shopee’s most recent “adjustments.”

According to the statement, “The company has told CMPU that adequate compensation packages will be offered to affected employees and that these packages will be in line with market norms.”

“Employment facilitation and help, including career counseling and job matching services via CMPU’s network and e2i will be supplied, if requested,” the sentence reads. 

At the beginning of this month, the largest e-commerce company in Southeast Asia decided to withdraw dozens of employment offers. At the time, the parent firm Sea stated that it had recently canceled some offers at Shopee “due to revisions to hiring plans” on specific tech teams, but the company declined to disclose the exact number of offers that were withdrawn.

How many are jobless?

A number of workers in Shopee’s Southeast Asian food delivery and online payment ShopeePay teams, as well as staff members in Mexico, Argentina, and Chile, were let go in June. Shopee’s headquarters are located in Singapore.

Forrest Li, the CEO of Sea, wrote a letter to the staff of the company last week in which he said that the company had recently made “some unpleasant announcements.” He cited a chaotic moment in the technology industry as the reason for this.

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In his writing, he said, “Unfortunately, we are not immune to these shocks.”

In his letter, Li referred to establishing self-sufficiency as the “number one target” for the next 12 to 18 months. This “number one objective” entails achieving “positive cashflow” as quickly as feasible.

The net loss that Sea posted for the second quarter was $931 million, which is more than double the loss that Sea reported for the same time a year earlier.

Chan Ih Ming, executive director of Digital Industry Singapore, stated in comments that were provided to CNA that in light of the recent slowdown in the economy, businesses need to decide “how best to position themselves for the future,” which may involve adjusting the workforce strength and profiles that they currently employ.

“The rapid growth of the technology sector in recent years has led to intense competition for tech talent globally, resulting in wage escalation and poaching even beyond the tech sector,” he added. “The rapid growth of the tech sector in recent years has also led to an increase in the number of countries in which the tech sector operates.”

According to him, jobs in the technology sector continue to be in great demand, and the number of available positions increased by approximately 10,000 annually across Singapore’s economy in the past year. This was notably true for machine learning engineers and backend developers.

Mr. Chan stated that this was largely the outcome of faster digitization initiatives across firms that have emerged as a result of the COVID-19 outbreak.

“As global technology businesses continue to invest in Singapore, and as many local technology companies expand in order to pursue growth in the region, we continue to maintain our optimism on the growth potential of Singapore’s technology sector.”