On September 26, it was reported that Shopee, an e-commerce giant with operations in Southeast Asia, demanded that laid-off employees pay compensation for damaged work computers. In some cases, this involves covering costs of around 2,500 yuan ($349) for an Apple computer. Shopee confirmed this policy to Chinese media outlets, claiming that that it has affected less than ten former colleagues and that it is part of normal resignation procedures.
Established in 2009, Shopee is an online e-commerce platform headquartered in Singapore, operating under Sea Limited. The platform was first launched in Singapore in 2015, and consists of two departments, “Auction” and “Mall.”
On September 19 this year, Shopee was revealed to have initiated large-scale layoffs in China, and the proportion of layoffs in some departments was as high as 30% to 60%. Some Shopee employees said that this time, instead of layoffs in accordance with the overall proportion, some business departments and positions were “optimized” and adjusted. It has been less than a month since the cancellation of contracts at the Singapore headquarters that broke out earlier.
Shopee’s layoffs are not without warning. In 2021, Shopee broadened its expansion plan. In Europe, it opened sites in Poland, Spain and France, and in Latin America, it opened sites in Argentina, Mexico, Chile and Colombia, among other countries. It also implemented a large-scale layout when entering the Indian market.
After experiencing a massive expansion in 2021, Shopee has faced issues this year, closing business units in countries such as France, India, and Spain successively, and its business scale continues to shrink. Given the latest financial report from its parent company, the net loss in the second quarter was $931 million. The growth of its main source of profit, digital entertainment, slowed down, performance was under pressure, and losses continued, making it difficult to continue to support the continuous expansion of Shopee.
Forrest Li, the founder and CEO of Sea Limited, also issued an internal letter saying that the top management of the company had decided to voluntarily give up remuneration, also reducing the company’s various expenses. This has involved measures such as the business travel budget was lowered to economy class fares, meal budget was limited to $30 per day, and hotel stay spending limit was decreased to $150 per night.
In a second-quarter report released recently by Sea Limited, the company’s revenue in the period was $2.9 billion, a year-on-year increase of 29%, slightly lower than the expected $2.967 billion. Losses were still high. The financial report shows that net losses in the second quarter were $931 million, compared with net losses of $434 million in the same period last year, up 114%. The adjusted EBITDA (earnings before interest, tax, depreciation and amortization) totaled $506.3 million, while the figure was $24.1 million a year earlier.
Specifically, Shopee’s overall adjusted EBITDA loss in the second quarter was $648 million, which was the bulk of the loss. The growth rate of its gross merchandise volume (GMV) fell to 27%, reaching $19 billion, lower than the $19.9 billion after the market lowered expectations. Moreover, the growth of its e-commerce business has slowed down.