Sea’s billionaire CEO to forgo salary as cost cuts spread

Sea’s billionaire CEO to forgo salary as cost cuts spread

Sea Ltd’s top management will forgo their salaries and tighten company expense policies, as the Singapore gaming and ecommerce giant tries to shield itself from the economic slowdown threatening tech companies.

“The leadership team has decided that we will not take any cash compensation until the company reaches self-sufficiency,” chief executive officer Forrest Li said in an internal memo sent to staff Thursday, days after Sea shut down operations in some markets and trimmed staff across its divisions. “We can now see that this is not a quickly passing storm: these negative conditions will likely persist into the medium term.”

In his 1000-word missive, seen by Bloomberg News, the billionaire addressed head-on the struggle for Sea in an era of rising interest rates, accelerating inflation and a volatile market. The company has lost about US$170bil (RM770.52bil) of market value since an October high on questions about its money-making prospects and a global decline in tech stocks.

“With investors fleeing for ‘safe haven’ investments, we do not anticipate being able to raise funds in the market,” Li said, reiterating that the company’s primary objective for the next 12 to 18 months is to achieve positive cash flow as soon as possible.

The company will cap business travel to economy class flight fares, with travel meal expenses limited to US$30 (RM135) a day. It will also curb spending on hotel stays for business trips to US$150 (RM679) a night, and cull reimbursement for meals and entertainment bills.

“The only way for us to free ourselves from relying on external capital is to become self-sufficient, generating enough cash for all our own needs and projects,” Li said.

Sea is facing increasing pressure to simultaneously grow and control costs. Consumers are pulling back on spending online as rising interest rates and prices weigh on the economy, while investors are becoming less willing to bankroll growth without profits.

After grappling with a string of extraordinary setbacks this year – including India’s abrupt ban of its most popular mobile game – the company is looking to take significant steps to move from unbridled growth to profitability.

The company has said it expects gaming arm Garena to post its first decline in bookings this year, and last month, it withdrew its 2022 ecommerce forecast. – Bloomberg