Singapore based gaming and e-commerce giant Sea Ltd¡¯s top management, including the CEO, will forgo their salaries and tighten company expense policies. The firm's move is an effort 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 (CEO) Forrest Li said in an internal memo sent to staff on Thursday,?days after the firm shut down operations in some markets and trimmed staff across its divisions.. He mentioned ¡°We can now see that this is not a quickly passing storm: these negative conditions are likely to persist into the medium term¡±.
As per Forbes real time rich list, Sea's CEO?Forrest Li currently has a net worth of $3.8 billion.?Li had entered the ranks of Singapore's richest, after listing Sea on the New York Stock Exchange in October 2017.
In his 1000-word official letter, the billionaire CEO 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$170 billion of market value since an October high on questions about its moneymaking prospects and a global decline in tech stocks, as per Bloomberg report.
¡°With investors fleeing for ¡®safe haven¡¯ investments, we do not anticipate being able to raise funds in the market,¡± CEO 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 a day. It will also curb spending on hotel stays for business trips to US$150 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,¡± the billionaire CEO said.
Sea Ltd is looking to take significant steps to move towards profitability, which does not seem to be an easy road after grappling with a string of extraordinary setbacks this year, including India¡¯s abrupt ban of its most popular mobile game Garena?Free Fire. In March 2022,?Singapore's ministry of trade and industry had said that it hoped India's ban on the popular gaming app?could be resolved quickly. As per various media reports, it was world's most downloaded game in January and February this year.
Also, the company has been facing increasing pressure to simultaneously grow and control costs. As per the report, 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.
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