e-commerce firm Shopeea subsidiary of Sea Ltd, will pull out of Argentina and close its local operations in Chile, Colombia and Mexico, while its gaming unit Garena will lay off hundreds of employees in Shanghai, people familiar with the matter said.
Shopee CEO Chris Feng said in an internal email seen by Reuters that “in light of the current heightened macro uncertainty” Sea needed to “focus resources on core operations.”
Sea, based in Singapore and listed on the New York Stock Exchange, has cut jobs at all of its units in recent months after posting nearly $1 billion in losses in the April-June quarter. Garena’s biggest source of income is the Free Fire mobile game.
Sea will leave Argentina completely, according to the email and three sources with direct knowledge of the matter. It will keep cross-border operations in Chile, Colombia and Mexico but will lay off dozens of local employees, the people said.
Shopee confirmed to Reuters that it will operate a “cross-border model in Chile, Colombia and Mexico, and will close in Argentina.”
Three different sources told Reuters that the company was laying off people in Shanghai, which is a major development center for Garena.
Two of the sources said that up to 15% of the Shanghai office’s employees were laid off this week, with the third source confirming the number was “several hundred”.
Sea saw its market value soar to more than $200 billion last October thanks to the popularity of its gaming and e-commerce units during the pandemic, but its shares have since fallen and are now worth just $27 billion. .
“In line with our previously stated focus on enhancing the long-term strength of our ecosystem, Garena has made some adjustments to certain teams,” affecting a “number of roles,” a Sea spokesperson told Reuters.
Along with job cuts in the gaming sector, several new games have been cancelled, according to these last two sources. A few rounds of minor layoffs have already taken place at various teams in recent weeks, they said.
Free Fire, a shooter game, has long been Sea’s most lucrative, grossing more than $4 billion as of 2021, following its 2017 launch, according to research firm Sensor Tower.
Gaming profits have helped sustain unprofitable but fast-growing businesses like Shopee, a practice some analysts have called unsustainable.
Sea withdrew its e-commerce forecast for the year.
Video game revenue has also dropped as Free Fire has struggled after the game was banned by the Indian government in February.
In March, Shopee announced the closure of its fledgling operations in India and France.
Reuters has reported that Garena is cutting staff at its Booyah game streaming platform and that Shopee has terminated dozens of job offers in recent weeks.
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