The senior leadership of Sea Ltd Forrest Li Xiaodong, a gaming and e-commerce powerhouse based in Singapore, has decided to sacrifice their wages and tighten the laws governing business expenses in an effort to protect itself from the economic slump that is affecting technology firms.
“The leadership team has decided that we will not take any cash compensation until the company reaches self-sufficiency,” chief executive Forrest Li said in an internal memo sent to staff on Thursday. This announcement came several days after Sea ceased operations in certain markets and reduced staff across all of its divisions.
“It is clear to us at this point that this is not a storm that will blow over quickly: these unfavorable circumstances are likely to last into the medium term.” The billionaire addressed the fight for Sea in an age of increasing interest rates, growing inflation, and a volatile market head-on in his one thousand word email, which was viewed by Bloomberg News.
Since reaching its all-time high in October, the company’s market value has dropped by approximately US$170 billion, which is equivalent to about S$239 billion. This drop is due to concerns regarding the company’s future profitability as well as a general decline in the price of technology stocks worldwide. “With investors running for’safe haven’ investments, we do not anticipate being able to raise funds in the market,” Mr. Li said, reiterating that the primary goal of the company for the next 12 to 18 months is to achieve positive cash flow as quickly as possible. “We do not anticipate being able to raise funds in the market,” Mr. Li said. “We do not anticipate being able to raise funds in the market.”
The corporation will only pay for tickets in the economy class for business trips, and the cost of meals while on the road will be capped at US$30 per day. In addition to this, the cost of staying in hotels on business trips will be capped at US$150 per night, and reimbursement for the costs of meals and entertainment would be reduced.
According to Mr. Li, “the only way for us to liberate ourselves from dependence on foreign money is for us to become self-sufficient, earning enough cash for all of our own needs and initiatives.” This is the only way for us to free ourselves from dependence on external capital.
Sea is coming up against increased pressure to maintain cost management while still maintaining its rapid expansion. Rising interest rates and prices are having a negative impact on the economy, which is causing consumers to cut down on their spending online. At the same time, investors are becoming less willing to finance expansion without profitability.