- Kyle Chua
Sea’s Top Brass Forgoes Salary As Cost-Cutting Measures Ramp Up
The current economic slowdown appears to be hitting Sea Ltd particularly hard, with the Singapore e-commerce and gaming giant continuing to ramp up cost-cutting measures.
Bloomberg reports that Sea's top management personnel have opted to forgo their salaries until the company is once again profitable.
"The leadership team has decided that we will not take any cash compensation until the company reaches self-sufficiency," said CEO Mr Forrest Li in an internal memo to staff on Thursday. "We can now see that this is not a quickly passing storm: these negative conditions will likely persist into the medium term."
The billionaire tech executive in the same memo further explained that the company's objective in the next 12 to 18 months is to reach a positive cash flow as soon as possible. That has so far proven to be a struggle for the company due to rising interest rates brought about by inflation and volatile markets.
"The only way for us to free ourselves from relying on external capital is to become self-sufficient, generating enough cash for all our own needs and projects," said Mr Li.
The company will also tighten other expenses, including capping business travel flight fares to economy class. Travel meals, meanwhile, will be limited to US$30 a day, while hotel stays for business trips will be limited to US$150 a night.
The news comes days after Sea announced that Shopee, its ecommerce platform, would shut down local operations in Chile, Colombia and Mexico and leave Argentina entirely. Shopee also pulled out of India and France earlier this year.
Sea is reportedly facing more pressure to control costs, with consumers spending less online and investors becoming skittish about betting on unprofitable companies. The internet conglomerate lost about US$170 billion in market value, with it now worth about US$27 billion, down from US$200 billion late last year. Apart from the slowdown in online sales, India's ban on Sea's popular mobile shooter Free Fire was also a factor in the decline.
Sea's top management are reportedly forgoing their salaries until the company is once again profitable as the internet conglomerate continues to ramp up cost-cutting measures.
The company will also tighten other expenses, including capping business travel flight fares to economy class.
The news comes days after Sea announced that Shopee, its ecommerce platform, would shut down local operations in Chile, Colombia and Mexico and leave Argentina entirely.