Sea Ltd Lays Off E-Commerce, Gaming Staff After Heavy Loss

Singapore tech heavyweight Sea Ltd is to consolidate the Latin American operations of its e-commerce arm Shopee and lay off hundreds of Shanghai staff from its Garena gaming unit following poor quarterly results last month.

Shopee, southeast Asia’s biggest e-commerce company, confirmed it was planning to exit Argentina entirely and shutter local operations in Chile, Columbia and Mexico, planning instead to maintain cross-border operations in the latter three countries.

The company said in a statement it would operate a “cross-border model in Chile, Colombia and Mexico, and close in Argentina”.

Layoffs

The shift is to involve laying off dozens of local employees, Reuters reported, citing unnamed sources.

Shopee chief executive Chris Feng reportedly said in an internal email that in light of the “current elevated macro uncertainty” Sea needed to “focus resources on core operations”.

Reuters reported that the Garena unit was laying off people in Shanghai, a major development centre for the gaming business.

Reports said the division was laying off up to 15 percent of its Shanghai staff, with one source saying the number was in the “low several hundreds”.

Gaming revenues

Sea said it has “made some adjustments to certain teams” impacting a “number of roles”.

The company has long subsidised loss-making businesses such as Shopee with profits from its gaming division.

However, revenues of its most popular game, Free Fire, have declined after it was banned by the Indian government in February.

New York-listed Sea has been cutting jobs across its units in recent weeks after reporting a nearly $1 billion (£860m) quarterly loss in the April-June quarter.

Cutting losses

In August the company reported a net loss of $931m for the second quarter ended 30 June, more than doubling from $433.7m for the same quarter a year ago.

The losses widened even as economics at the Shopee business “improved significantly”, Sea chief executive and chairman Forrest Li said at the time.

The company withdrew its 2022 e-commerce forecast as its shares plunged 14 percent.

Sea’s market capitalisation soared during the pandemic to peak at $200bn last October, only to plummet since then to about $27bn currently.