Sea Makes Business Efficiency, Shopee Indonesia Lays Off Some Employees

Parent company marketplace Shopee, Sea Ltd., immediately laid off around 3% of its employees in Indonesia as part of the company's regional efficiency to cut losses and improve reputation in the eyes of investors.

In Sea's annual report for 2021, the company is listed as having more than 63 thousand employees in total. As of the first quarter of 2022, the number of Shopee Indonesia employees was 6.232 people. This means that around 180 of them are at risk of being laid off starting from head of department up to position an entry level or junior staff.

Reporting from Bloomberg, the Singapore-based company informed the affected staff starting Monday (19/9). According to the memo in circulation, this change is part of the company's ongoing efforts to optimize operating efficiency to maintain the integrity of the entire business.

The company also revealed that this was a very difficult decision to make. Without elaborating, the management tried to offer appropriate compensation in the memo distributed that day, "In general, we will offer a fair package for employees who part with us and provide assistance if needed."

Sea Group Co-Founder Forrest Li also announced in an internal memo that the board of directors would not receive salaries and tightened company spending policies. The company, known as Tencent Holdings Ltd. as its biggest investor, is trying to protect itself from the economic slowdown.

Sea is said to have lost about $170 billion in market value since October. This figure is the highest and raises questions about the company's monetization strategy in an era of rising interest rates and sharpening competition from Alibaba Group Holding Ltd. in the Asian region.

Although the revenue of Sea Group or Shopee's parent company in the second quarter of 2022 rose 29% year on year, this does not relieve them of efficiency. According to the Sea Group's financial report, the company's revenue reached $2,94 billion in the second quarter of 2022.

Shopee Travel in Indonesia

Shopee is one of Sea's two largest businesses in Indonesia. The company started its digital business in the entertainment sector with the Garena platform which popularized the game "Free Fire". Sea Group launches platform E-commerce Shopee in Southeast Asia and Taiwan in June and early July 2015, and in Brazil in the fourth quarter of 2019.

In 2021, the company briefly expanded into new markets in Latin America such as Mexico, Chile and Colombia, and to Poland and Spain. However, recent information indicates that Shopee has withdrawn its team from markets in Europe and Latin America. Another polemic is also brewing in India due to rising tensions with Chinese companies.

Beside e-commerce, The company also expanded its line of business to digital financial services platforms in Vietnam and Thailand in 2014. At the end of 2019, SeaMoney was officially introduced as the overall brand for the company's digital financial services business. Then in the last year, the company further expanded its digital financial service offerings across credit, insurtech and digital banking services, including launching SeaBank in Indonesia.

Business E-commerce is indeed one of the important drivers of the digital economy. In Indonesia, business competition is quite tight. According to iPrice data, based on a number of analyzes of traffic and engagement on social media, Shopee is ranked second after Tokopedia. However, this ranking is quite volatile, in several previous periods Shopee had led the way at the top.