Sea Ltd., the parent company of e-commerce platform Shopee, is reportedly laying off employees in Shopee Indonesia as part of regional job cuts to curb losses.
Citing an internal memo and a source familiar with the matter, Bloomberg News reported that Sea is reducing Shopee Indonesia’s headcount by 3% and that the company will begin notifying affected staff on Monday.
“These changes are part of our ongoing efforts to optimise operating efficiency with the goal of achieving self-sufficiency across our business. We are extending support to our affected colleagues during this transition,” a Shopee spokesperson told DealStreetAsia.
Radynal Nataprawira, the head of public affairs at Shopee Indonesia, said in a prepared statement that global economic conditions have demanded the company to adapt quickly and evaluate business priorities to become more efficient.
“This has been a very difficult decision for us,” Nataprawira said. “The company will focus on being self-sufficient and sustainable, and we want to strengthen and ensure that we have stable business operations in this challenging economic situation.”
Shopee Indonesia offers affected employees severance payments with an additional one month of salary. They can also use the company’s health insurance facilities with all the benefits until the end of 2022.
The company claimed that business operations and services will not be affected by the layoff.
Sea has been tightening its belt as it braces for a global economic slowdown with measures including more stringent policies on business trips.
Earlier this month, Reuters reported that Shopee cut headcount in Mexico, Colombia, and Chile, while shutting down the Argentina operation due to elevated macro uncertainty.
In June, Shopee reportedly laid off its employees across Southeast Asian and Latin American markets as part of the efforts to rationalise its e-commerce business.
Sources told DealStreetAsia that nearly half of Shopee Thailand’s payment and food delivery teams have been impacted by the downsizing move. At the time, however, Shopee Indonesia said there was no plan to terminate any of its 20,000 employees.
“Shopee Indonesia has been showing a good performance and Indonesia remains a priority market where we keep developing our business to help more SMEs,” the company said in a previous statement, noting that the company was still actively recruiting digital talents.
Shopee had already shut down operations in India and France earlier this year.
The New York-listed Sea’s net loss doubled to $931 million for the April-June 2022 period from $433.7 million a year earlier despite an improvement in Shopee’s unit economics across its markets.
The company said it expects overall e-commerce activity to slow following significant growth during pandemic restrictions. Sea had indicated the need to focus on the efficiency and long-term sustainability of e-commerce business due to macroeconomic uncertainties.