Shopee to cut jobs in Thailand amid economic challenges
published : 26 Sep 2022 at 20:01
updated: 27 Sep 2022 at 11:36
writer: Suchit Leesa-nguansuk
E-marketplace company Shopee is pursuing fresh job cuts in Thailand, albeit a low single-digit reduction of its headcount in the country, as part of its efforts to attain profitability and weather economic challenges.
The move was announced in a town hall meeting on Monday morning, according to a source at Shopee. The source did not give the exact figure of the headcount reduction.
The source described the approach as the ongoing business restructuring of the e-marketplace.
One of the key reasons for the layoffs is the current macroeconomic situation, while another is to pave the way for long-term profitability as Shopee pursues self-sufficiency, the source said.
Shopee is the e-commerce business arm of Singapore-headquartered internet giant Sea, which is part-owned by Chinese internet firm Tencent Holdings.
Shopee is one of Sea’s two major businesses. Another is the Garena gaming unit.
Garena earlier cut jobs in Southeast Asia, including Thailand.
In June, Sea laid off 300 employees working for Shopee, online payment service ShopeePay and food delivery arm ShopeeFood in Thailand.
Shopee Thailand posted 13.3 billion baht in revenue in 2021, up 129% year-on-year, but saw massive losses of 4.9 billion, worsening by 19.24% year-on-year, according to Creden Data, a data analytics service provider.
According to the Businessinsider news website, Forrest Li, founder, chairman and chief executive of Shopee, issued a memo to Shopee employees that outlined cost-cutting measures.
"Our number one objective for the next 12-18 months is achieving self-sufficiency," Li wrote in the memo.
The company will be restricting employee expenses, capping all flights at the economy level, and executives will temporarily forgo compensation, the memo read.
Pawoot Pongvitayapanu, an e-commerce pundit, said Shopee is concentrating more on profitability as investors are concerned about rising inflation and the Russia-Ukraine war.
With limited financial injections, Shopee cannot aggressively expand its business, he said.
Shopee has closed its operations in various countries amid the global economic challenges.
The E-marketplace market in Thailand is now unlikely to see the kind of cutthroat promotional and discount campaigns that were vigorously pursued in the past, he said.
Shopee’s rival Lazada has also focused on profit-making, with better operating results in the past two years, said Mr Pawoot.