E-marketplace Shopee is pursuing layoffs across markets in Asean, including Thailand, according to industry sources, as the company is believed to have become more cautious about spending and more focused on attaining profitability rather than burning cash.
The sources, who requested anonymity, echoed an earlier report by dealstreetasia.com which indicated that the layoffs have affected employees within the region, including Indonesia, Vietnam and Thailand.
It was reported that the firm had sent emails notifying employees affected by the layoffs.
The job cuts also extended to online payment service ShopeePay and food delivery arm ShopeeFood, the report said.
Almost half of the payment and food delivery teams in Thailand have been affected by the layoffs while Shopee has also adopted a hiring freeze, it said.
Shopee has yet to respond to the report describing its mass layoffs.
The industry sources confirmed with the Bangkok Post that the layoffs have been taking place.
ShopeeFood earlier planned to hold a grand opening of its service but has decided to cancel the event, the sources said.
Shopee is the e-commerce business arm of Singapore-headquartered internet giant Sea, which is part-owned by Chinese internet firm Tencent Holdings.
Shopee ended its business operations in India and France earlier this year.
The sources said the job cuts at Shopee were most likely to have been caused by global economic woes as well as the surge in inflation and fuel costs. Stocks of tech companies are reeling from capital outflow while China's latest harsh policy has also affected Chinese tech firms' stocks.
The sources said global economic strife is affecting tech firms in other regions and leading to job cuts among large startups in Asean.
Since November 2020, some 786 startups around the world have experienced layoffs involving 132,274 employees, according to layoffs.fyi, a website tracking the layoff situation worldwide.
The sources said notifying employees that they had been laid off via email is quite a harsh approach. Some unhappy employees might not agree with it and fight back by claiming unfair termination of their work contracts.
According to Creden Data, a data analytics service provider, Sea's business in Thailand in 2021 saw total revenue of 43.2 billion baht and losses of 5.9 billion baht.
Pawoot Pongvitayapanu, an e-commerce pioneer and chief executive of Creden Co, said Shopee's payment service has experienced rising expenses as ShopeePay has extended its service to merchants offline while its food delivery services have faced higher expenses due to discount promotions and a delivery cost subsidy.
Despite dominating the food delivery market, Grab and Line Man are still not profitable in this field due to a substantial amount of spending, he said.
Last year, Sea's biggest earnings in Thailand came from Shopee Express, its express delivery and storage services with 15 billion baht in revenue, while its most profitable business is ShopeePay with 153 million baht in profits.
E-marketplace Shopee recorded the biggest losses within the group, reaching 4.9 billion baht.
Wisan Sirikul, corporate marketing director of e-commerce platform JD Central, said the job cuts signal that the tech industry is now being more cautious about spending, particularly in terms of marketing campaigns and recruitment.
"In developed countries, it takes 15 years before e-commerce operators can attain profitability. In this economic turmoil, it is pushing these operators towards being more cautious about their spending as well as pursuing cost saving and job cuts for their non-core business to strive to attain profitability," Mr Wisan said.
