Most Sea employees to get 5% raise, now that company is profitable: Bloomberg

SEA is giving a 5 per cent salary bump to most of its employees from July, reported Bloomberg on Monday (May 8).

Citing a staff memo sent by chief executive officer Forrest Li and seen by Bloomberg, the news agency said employees who joined on or before Mar 31 are eligible for the raise.

This comes as the Singapore-based e-commerce and gaming company’s cash balance is now on a growth trajectory following a decline the year before, and as Sea has now achieved its goal of attaining “self-sufficiency”.

“This past year was probably the most difficult period in the history of our company,” Li was reported to have written in the memo.

“Painful” decisions which the management had to make, he said, included cutting thousands of jobs in the face of a deteriorating business environment.

The salary hike marked a milestone for the company, which had previously announced several rounds of layoffs and salary freezes. In September 2022, Li said that Sea’s leadership team would forgo cash compensation until the company reached self-sufficiency.

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In March, Sea recorded its first profit – about 14 years after its founding – in Q4 FY2022 with a net income of US$422.8 million, a significant reversal from its US$616.3 million loss in Q4 FY2021.

Its share price had soared following the announcement of its surprise profits: it gained 21.8 per cent and added US$8 billion to its market value on Mar 7.

The profitable quarter was in part due to the company’s aggressive cost-cutting measures. Sea reversed US$130 million in previous accruals for certain expenses, and reduced its sales and marketing expenses by 61.2 per cent to US$473.6 million.

Revenue was up 7.1 per cent to US$3.5 billion for Q4 FY2022, from US$3.2 billion in the same period the year before. Earnings per share stood at US$0.76 for the quarter.

The New York-listed company had US$6 billion in cash as at end-2022, and US$6.9 billion in current liabilities.

Sea is expected to report its earnings for the first quarter of 2023 next Tuesday (May 16) at 7.30 am in the US, or 7.30 pm in Singapore.

Shares of Sea on the New York Stock Exchange closed 3.2 per cent or US$2.41 higher at US$78.41 last Friday.