Shopee (Thailand) is introducing its new brand ambassador, Davika Hoorne, also known as Mai Davika, at Shopee 3.15 Consumer Day in March. (Photo: Shopee (Thailand)
E-marketplace company Shopee is pursuing further job cuts in Thailand as part of its efforts to achieve profitability and weather economic challenges, albeit with a low single-digit drop in headcount in the country.
The move was announced at a town hall meeting on Monday morning, according to a Shopee source. The source did not give the exact number of job cuts.
The source described the approach as the ongoing business restructuring of the e-marketplace.
One of the main reasons for the layoffs is the current macroeconomic situation, while another is to pave the way for long-term profitability as Shopee aims to be self-sufficient, the source said.
Shopee is the e-commerce division of Singapore-based internet giant Sea, which is part of Chinese internet company Tencent Holdings.
Shopee is one of Sea’s two main companies. Another is the Garena gaming unit.
Garena has previously cut jobs in Southeast Asia, including Thailand, over poor gaming business performance.
In June, Sea laid off 300 employees working for Shopee, online payment service ShopeePay and grocery delivery service ShopeeFood in Thailand.
Shopee Thailand posted sales of 13.3 billion baht in 2021, up 129% year-on-year, but posted massive losses of 4.9 billion, a 19.24% year-on-year deterioration, according to Creden Data, a data analytics service provider is equivalent to.
Forrest Li, Shopee’s founder, chairman and chief executive officer, issued a memo to Shopee employees outlining cost-cutting measures, according to news website Businessinsider.
“Our ultimate goal for the next 12 to 18 months is self-sufficiency,” Li wrote in the memo.
The company will limit employee spending, limit all economy-level flights, and executives will temporarily waive compensation, the memo said.
Pawoot Pongvitayapanu, an e-commerce expert, said Shopee is focusing more on profitability as investors are concerned about rising inflation and the war between Russia and Ukraine.
With limited cash injections, Shopee can’t aggressively grow 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 experience such promotion and discount campaigns which have been vigorously pursued in the past, he said.
Shopee’s rival, Lazada, has also focused on making a profit, posting better operating results over the past two years, Mr Pawoot said.