According to many media reports, Sea Group – Garena’s parent company – has laid off more than 7,000 employees in the past 6 months, accounting for 10% of the total workforce.
This year is the “darkest time” for Sea Group since Tencent reduced its stake in early 2022. Bad news for Sea Group followed one after another when the foreign game market was complicated. Sea Group’s share price has experienced a sharp decline in the past year.
In September, Li Xiaodong, founder and CEO of Sea Group, stated that rising interest rates and rising inflation had caused market turmoil and the company was having difficulty achieving its goals. At the same time, he also said that the company’s main goal in the next 12 to 18 months is to achieve positive cash flow as soon as possible.
Sea Group growth index.
Considering the current situation, perhaps Sea Group is still struggling to find a new growth direction in the quagmire. According to multiple sources on the matter, the layoffs are mainly in Sea’s Shopee e-commerce business and SeaMoney digital financial services division.
In fact, e-commerce, which should be the business in which Sea Group earns the most revenue this year, is quite poor. In March of this year, Shopee closed its business in India and France, then withdrew from the Spanish market in June. Some employees of Shopee’s food delivery and payment department in Argentina, Chile, Mexico and other Latin American countries were also laid off.
It is worth mentioning that not only Sea Group, on November 15, the New York Times reported that Amazon plans to lay off about 10,000 employees. This layoff accounted for 3% of the total number of employees in July. This is Amazon’s largest layoff in 28 years, before many giants such as Twitter, Meta, and Google have also implemented similar policies in turn. on one’s own.
Regarding the game business, Garena’s game segment, has started to reduce costs and increase efficiency early. In September this year, according to Reuters, SEA Group closed down the community app and broadcast live game of Garena BOOYAH! At the same time, a number of large projects related to blockchain and cloud gaming were closed.
According to Sea Group’s Q2 financial report, the revenue and profit of the Garena games business both declined to a certain extent, which may be related to the decrease in revenue of the flagship product. Free Fire. So, Garena is constantly experimenting with some new directions, such as this year in a row testing new SLG game, Alpha Ace shooter with 5v5 FPS gameplay, etc.
Game Alpha Ace used to be famous for testing.
However, these new games have yet to hit the market, and Garena takes more time to complete. Not long ago, Riot Games announced to regain the rights to operate League of Legends and TFT (TFT Mobile) games in Southeast Asia in January 2023. In the near future, these two games will be released in Vietnam. The SEA region will be directly operated by Riot Games, while the Taiwan market will be transferred to Taiwan Mobile.
Perhaps Garena’s most notable move in recent times is the announcement of an agent for Square Enix’s Fullmetal Alchemist M-based mobile game, which has achieved outstanding ratings in the Japanese market, China. Products released in Japan will help Garena’s operations to some extent.
