Shopee, the Singapore-based e-commerce giant, once the darling of investors, is now facing a bleak fundraising prospect in today’s volatile market.
Sea Limited, Shopee’s parent company, has lost about $170 billion in market value over the past year, according to Bloomberg. This is in stark contrast to September 2021, when Sea raised $6 billion through the sale of shares and convertible bonds in what was considered the largest funding round in Southeast Asia at the time.
Shopee is currently going through a difficult period. Photo: Getty Images.
In a 1,000-word memo sent to Shopee employees on September 15, Forrest Li – the billionaire founder, Chairman, and CEO of Shopee – outlined the drastic cost-cutting measures that will be implemented in the coming weeks. next time.
Below is the entire “heart letter” he sent to employees before the mass layoffs.
“Dear “Sailor”,
We’ve had to make some reluctant decisions lately. I know many of you have seen negative news about the company in the media, and may have been shocked that Shopee had to withdraw from many markets around the world. So I am writing today to clarify what is happening and also to talk to you about what we need to do in the next 12-18 months.
As you know, this is a difficult time for our industry. When countries reopened after the pandemic, users changed their spending habits, so our business was no longer as booming as before. And then the world suffered a series of macroeconomic blows, from conflict in Europe and massive supply chain disruptions to soaring inflation and slowing economic growth. It was a rough year for everyone and sent capital markets into turmoil. Some economists are even predicting a global recession.
Sadly, that storm did not spare us. Every department has tried its best to get through difficult times. The company has gradually implemented new restrictions and tried to adapt to the circumstances, even if this led to reluctant decisions. I know many of you have had to work overtime, get lower pay, and try to stay positive. Thank you guys for this.
For now, we must admit that this situation is likely to persist in the medium term. Looking into the future, the leadership team and I are making a number of decisions to help the company not only survive this storm but also stay on top of it. I am writing this letter looking forward to receiving your support so that the plans are implemented smoothly.
The company’s number one goal over the next 12-18 months is to achieve self-sufficiency, which means achieving positive cash flow as soon as possible. Right now, thanks to years of hard work and prudent action, we have a solid cash base that puts the company in a much safer position than its tech counterparts. However, if we use this source of money carelessly in the context that investors are looking for a “safe haven”, we will not be able to predict the ability to raise capital in the market.
The only way we don’t have to depend on outside capital is to increase our self-sufficiency, generating enough cash for all of the company’s needs and projects. If we can do this, it will have great implications for our future. We will be more relaxed, less affected by the external ups and downs that are hurting us today. We will be more steady and less distracted to focus on our own goals.
This is how I want Sea to weather this storm: to be in a position of certainty and independence, to choose her own path.
To achieve this, we need to do two things:
1. In the immediate future, we must find ways to reduce operating costs. The more cash we save each day, the more time we have to weather this storm. Every little bit counts.
2. In the long run, we must establish a cost-sensitive culture throughout the organization. In the past, the company has focused on prioritizing growth, and sometimes growth at all costs. This is not a wrong approach, as global conditions are ripe with opportunities. But now that the conditions have changed, we must also adapt. It is important to prioritize costs, not just for the company, but for the industry as a whole. In this period of uncertainty, the company that manages its finances well will emerge the strongest.
However, this is not easy to achieve. But if we are all willing to join hands to make efforts and tighten our belts, I am sure, we can make things happen.
Similar to others in the industry, the cost-tightening policy will take effect from October 1 (although I encourage you to do so immediately). Full details are available in the attached document, but I would like to highlight the following key points:
– Limit business flights to economy class and hotel stay to 150 USD/night.
– Limit the cost of meals when traveling on an international business trip to 30 USD/day.
– No refunds for meals or entertainment inside or out
– For traveling by car, choose the most economical local car or taxi booking service.
These new rules will apply to all employees and the entire leadership team, myself included. In addition, management will not receive any remuneration until the company achieves self-sufficiency.
I know news like this will be hard to accept. We are closely monitoring the world situation, and trying to adapt as best we can. I look forward to your support and understanding to get through this wave together.
I will do my best to keep you updated on the company situation and world happenings. If you have feedback or new ideas, I welcome you to email me. I may not be able to reply to all of them, but I will definitely read and consider each message.
Thank you, our sailors, for all your great contributions to building the company. Without your hard work, we wouldn’t be where we are today. We now need to go through a transition that I know can be very painful and stressful, individually and collectively. But if we can adapt and break through, the company will push new limits. I believe self-sufficiency will be the key to our future success.
The next 12-18 months are very important to our company. Let’s stand together and work hard to get through this period.
Forrest”.
Source: CafeF
Source: Vietnam Insider