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Starting in July, most Sea employees will receive a 5% pay raise, a strong signal that the Southeast Asian e-commerce and gaming giant is on the mend.
Sea recovers from difficult period, large-scale staff cuts. (Photo: Bloomberg)
In a memo to employees on May 8, Forrest Li, founder of Sea Group, said that employees who joined the company before March 31 would receive a raise. He said that Sea had achieved “self-sufficiency” as its cash balance increased instead of decreasing as in previous quarters. The company achieved the target several months ahead of schedule set last year.
The pay increase marks a turnaround for Sea from recent quarters, when Mr. Li surprised investors with a companywide pay freeze and large-scale layoffs. It could presage a broader recovery in Southeast Asia’s tech sector, which is suffering from deep job cuts and plummeting valuations after the internet spending boom ends in 2022.
Sea reported its first net profit in the first quarter of this year since its founding 14 years ago. Its parent company Shopee took drastic measures last year to convince investors of its profitability, including thousands of job cuts, exiting major markets, and slashing more than $700 million in sales and marketing expenses.
Sea has endured plenty of pain during its recovery. At one point in 2020, it was the world’s best-performing stock, fueled by hopes that it would embody the region’s nascent e-commerce and entertainment boom. But its market capitalization has evaporated about $160 billion from its October 2021 peak amid questions about its earnings prospects and a slump in global tech stocks.
“The past year has been perhaps the most difficult period in our company’s history,” Mr. Li wrote. He cited “painful” decisions such as layoffs in the face of a challenging business environment. About 3,500 employees lost their jobs, according to Sea’s annual report. In September 2022, management said it would forgo salaries and tighten spending policies until it achieved self-sufficiency.
The external environment remains challenging, but with its autonomy, Sea has the foundation to grow again, Li said.
According to Vietnamnet
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