There has been an increasing number of tech companies that have enacted hiring freezes and layoffs.
Southeast Asia-based superapp Sea is making layoffs in its e-commerce business, Shopee, according to media reports. The headcount «adjustments» will impact Southeast Asia, Latin America and Europe, «Tech in Asia» reported, citing an internal company announcement. An email sent to employees from Shopee CEO Chris Feng said the layoffs will affect both fintech ShopeePay and ShopeeFood, the «Tech in Asia» report said.
DealStreetAsia» reported, citing two sources aware of the matter, that around half of Shopee Thailand’s payment and food delivery teams have been hit by the layoffs.
The SeaMoney business offers mobile wallet services and payment processing as well as credit, insurtech and digital bank services under the brands ShopeePay, SPayLater, SeaBank and other names, according to the annual report. The superapp has e-commerce operations under the Shopee brand and video-gaming under Garena.
To be sure, in growing tech companies, layoffs are relatively common as the business moves from buildouts of infrastructure to a maintenance approach.
The reports of layoffs are despite Sea reporting in May that in the digital financial services segment, including SeaMoney, revenue for the first quarter jumped around 360 percent from the year-earlier quarter to US$236 million, and its operating loss narrowed to US$133.91 million from US$156.83 million in the year-ago quarter.
The cuts came as the company’s stock has post a sea of red, falling around 68 percent so far this year; the shares traded down 7.4 percent Monday. The plunge tracked a drop off in video-gaming as many countries ease Covid-related movement restrictions, and as investors eye its continued net losses. The shares have also been caught in a general selloff of tech names. Source: Finews Asia
Fintech Unicorn Bolt Lays Off Workers
Maju Kuruvilla, the CEO of Bolt, a fast-growing tech company offering one-click checkout, wrote in a corporate blog post that there will be layoffs. His statement danced around the topic, writing, “It’s no secret that the market conditions across our industry and the tech sector are changing, and against the macro challenges, we’ve been taking measures to adapt our business.”
The New York Post reported that roughly “one-third of the company is being laid off,” which impacts about “130 U.S. and Canada staffers who were axed Wednesday, plus more than 100 European employees whose jobs will be eliminated in the coming days.
Klarna Laying Off 10% of the Global Workforce
Klarna, the Sweden-based fintech company announced plans to lay off about 10% of its global workforce, in a pre-recorded video message recently. It said it plans to cut an estimated 700 roles due to a souring economic climate.
“When we set our business plans for 2022 in the autumn of last year, it was a very different world than the one we are in today,” Klarna CEO Sebastian Siemiatkowski told staff in a pre-recorded video on Monday.
“Since then, we have seen a tragic and unnecessary war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession.”
Other financial tech firms, such as Robinhood and Better.com, have also taken measures to cut jobs and rein in costs this year.
Digital finance got a major boost from the Covid pandemic as people turned to online channels to make payments, apply for loans and trade shares. But the sector has taken a beating in 2022 as the war in Ukraine, rising inflation and higher interest rates have led investors to question lofty valuations in the space.
Wise, for example, has lost nearly two thirds of its market value since its July 2021 listing.
Rishi Khosla, CEO of U.K. online lender OakNorth, said there have been “massive bubbles” in fintech — from buy now, pay later to crypto. He said BNPL had been allowed to flourish largely thanks to “regulatory arbitrage.”
“Ultimately, the regulation is going to catch up with them, and therefore this the opportunity is not going to continue,” he said.
Editorial Comment: “We are now living in a totally new era” Henry Kissinger stated the other day. McKinsey followed suit in an other paper stating that the effects on the financial systems are unpredictable. So it will be interesting to observe how the fintechs will perform in the era of uncertainty.