Sea Group founder Forrest Li assures staff 'worst is over' in memo

Sea Group founder Forrest Li has assured staff that the worst is over and that its first-ever quarterly net profit marks a turning point for the company.In a memo sent out, seen by MARKETING-INTERACTIVE, Li said hat in the last few months, the company was forced to make difficult decisions to adapt and to put the company on a more stable footing with fewer inefficiencies.

He added that taking major action early in the crisis, much earlier than most in the industry, “was painful, but has put [the company] in a stronger position".  He acknowledged that this meant receiving negative press but ultimately led to adaptation to a “harsh external environment” more quickly. He added that self sufficiency means more sustained profiles. “We need to prove – not just to our investors, but to ourselves- that we can remain profitable for the long ha.”

The eCommerce company recently announced its financial results for its fourth quarter in 2022. It reported its first-ever profitable quarter with a total generally accepted accounting principle (GAAP) revenue at US$3.5 billion, up 7.1% year-on-year, according to a statement. It also saw a US$495.7 million in adjusted EBITDA, as compared to negative US$492.1 million for the fourth quarter of 2021.

In November last year, Bloomberg reported that Sea slashed about 7,000 jobs in six months in order to curb losses and most recently, MARKETING-INTERACTIVE confirmed that Shopee laid off about 200 employees in Indonesia just last week. Staff affected were within a customer service team in Indonesia and was made up of a mixture of full-time and contract staff. 

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Despite the positive outlook, Li noted in his memo that it was all dependent on the company's external environment and was based on the assumption that no major shifts happened. As of now, it reported that "large-scale changes" are complete. Li added that the company still needs to prove that it can sustain a profit and that its recent quarter's result is not just a "momentary blip".

"The task for all of us is to continue with our mission of doing less, but doing it better and getting the core of the business right," he said, adding that he also plans to travel more in the upcoming months.

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