Sea Ltd’s (冬海) billionaire founder declared a 5 percent pay increase for most employees starting in July, sending a strong signal to investors that he thinks the e-commerce and gaming business has turned the corner after years of bleeding losses.
Workers who joined on or before March 31 would get the salary bump, Sea chief executive officer Forrest Li (李小冬) said in a memo to staff yesterday.
He said Sea has reached “self-sufficiency,” as its cash balance is increasing rather than shrinking every quarter, a goal it achieved months ahead of a target set last year.
The across-the-board hike marks a reversal from just a couple of quarters ago, when Li surprised investors with a company-wide salary freeze and deep layoffs.
The Tencent Holdings Ltd (騰訊)-backed Southeast Asian Internet leader’s about-face could presage a broader recovery for the region’s tech sector, which has endured deep job losses and downward-spiraling valuations after a COVID-19-era online spending boom sputtered out last year.
Sea reported its first-ever quarterly net profit in March, about 14 years after its founding.
The company last year took brutal measures to convince investors of its profit-making ability, including cutting thousands of jobs, retreating from major markets and slashing more than US$700 million from its quarterly sales and marketing expenses.
In his 1,300-word missive, sent out about a week before the company is set to report its next earnings, Li addressed head-on the painful struggles Sea went through during its turnaround effort.
Sea was at one point in 2020 the world’s best-performing stock, buoyed by hopes that the company would embody Southeast Asia’s nascent e-commerce and entertainment boom.
However, the company lost about US$160 billion of market value since a peak in October 2021 on questions about its money-making prospects and a global decline in tech stocks.
“This past year was probably the most difficult period in the history of our company,” Li said, describing “painful” decisions, including layoffs the management had to take to navigate a worsening business environment.
Last year, Sea cut about 3,500 people from its workforce, its annual report said.
In September last year, the leadership team said they would forgo their salaries and tighten company expense policies until the company reaches self-sufficiency.
“The external environment is still a challenging one,” Li said. “With self-sufficiency, we have a foundation for strong growth once again.”
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