Sea Group rolls out series of cost-cutting measures in move for profitability

Photo: Sea Group

NYSE-listed Sea Group is making a series of austerity measures, as it braces for an economic slowdown threatening its e-commerce and gaming business.

This development was first reported by Bloomberg.

The measures include more stringent policies on business trips, transportation, meals, drinks and entertainment expenditure.

According to an internal memo seen by DealStreetAsia, business flights will be capped to economy class fares, with reimbursement for meals capped at $30 per day. Hotel stays will also be capped at $150 per night. All meals and entertainment expenditures may not be reimbursed. The measures will be in effect as of 1 October.

Sea Group further added that “pursuing self-sufficiency” is a key goal in this period of global economic uncertainty.

The NYSE-listed firm has also decided that its senior leadership team will no longer receive salaries until things turn around, according to the Bloomberg report.

“The leadership team has decided that we will not take any cash compensation until the company reaches self-sufficiency. We can now see that this is not a quickly passing storm: these negative conditions will likely persist into the medium term,” Sea Group’s chief executive Forrest Li was cited as saying in a Thursday announcement.

Li was also reported to have shared that the team does not anticipate raising funds in the current market, reiterating the firm’s objective to achieve positive cash flow as much as possible over the next 12-18 months.

Just last week, Sea Group’s Shopee was reported by Reuters to be exiting several Latin American markets, including Argentina, Chile, Colombia and Mexico. Its Garena gaming unit was also reported to be laying off hundreds of staff in Shanghai, it added.

Earlier this month, Reuters also reported that Shopee had rescinded dozens of job offers, as it attempts to stem widening losses and slower revenue growth at Sea Group.

Sea Group has so far announced that it expects its gaming unit Garena to post its first bookings decline this year. Its e-commerce unit Shopee also withdrew its e-commerce forecast for 2022.

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