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Tales of confusion and budget cuts: Inside Shopee Philippines' layoffs

Ramon Royandoyan - Philstar.com
Tales of confusion and budget cuts: Inside Shopee Philippines' layoffs
In the days leading up to the decision, former employees interviewed by Philstar.com said they were caught unaware. The move was announced in an online town hall on Sept. 26, as employees were then ordered to work from home.
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MANILA, Philippines — Tales of budget cuts, confusion and a warped sense of optimism colored the last days of employees who were axed by Shopee Philippines in a spate of layoffs in the country. 

“We had no idea,” was a familiar retort among former employees of Shopee. The company’s move to slash its workforce in the country, alongside its parent’s actions to cut back on its labor force around the globe in past months after a dismal second-quarter performance, came swift for many of its Filipino employees.

In the days leading up to the decision, former employees interviewed by Philstar.com said they were caught unaware. The move was announced in an online town hall on September 26, they said

“The letter says that we, as an organization, are eyeing for self-sufficiency, which goal is to be ready as to what’s going to happen in the future brought by the economic crisis. So most of us, I am sure we’re kind of expecting this to happen,” an employee said. “However, we never expected that it would be that soon.”

The forum lasted 10 minutes, former employees said. Shopee told its workforce that it wasn’t going “broke,” but projected the company would find it difficult to secure funds in the future.

“Honestly, it felt like as if someone died during the town hall. The atmosphere was so bleak and eerie,” another ex-employee said. 

Ex-employees were told their contracts would end by the end of September, or immediately once they signed. Likewise, health insurance coverage for retrenched employees would disappear by the end of the week. 

Some said they were “terrified” to even attend the online town hall. “We were so scared when they told us they were sending us emails after the town hall. Apparently, the email would be akin to eviction notices you see in Pinoy Big Brother, you’re safe or you’re impacted,” another ex-employee quipped. 

“There's also a bit of embarrassment on my end because I feel like people will think that I am not competent enough that's why I got laid off when, in reality. Shopee reduced headcounts in different teams as well,” a former employee said. 

As it is, the pandemic proved to be a flashpoint for Shopee and its direct competitor Lazada, both of whom benefitted from the movement restrictions that forced Filipino consumers to embrace the wonders of online shopping. 

Statista data showed that Shopee edged out Lazada in terms of website visits in the first quarter, recording 76.86 million compared to the latter’s 39 million. 

Shopee expanded at such a quick pace in the country — even introducing its own payment service ShopeePay — that they were bound to be hit by growing pains often facing startups. Sea Limited, Shopee’s parent company, took the downsizing route in anticipation of recession fears plaguing markets nowadays. 

As of reporting, Shopee has not responded to Philstar.com's request for comments.

Budget cuts, severance

The tech company was showing indications of slowing down, as interviews confirmed that in the weeks leading to the layoffs, Shopee told employees to go on a cost-cutting spree. The order came directly from Forrest Li, president of Sea Limited.

Shopee’s parent company held much potential as a tech company. The company held one of the largest fundraising programs in the region, netting an estimated $6 billion from sales of shares and bonds last September 2021.

The order stated that the budget will be limited for certain activities, which included team building, transport allowance, meal allowance during travels for work, airline tickets, transportation services, and reimbursements. 

“Wow, Shopee is cutting costs…If you’ve already planned for team building, we were told not to proceed with it. What’s happening? Shopee turning stingy suddenly?” an employee said. 

Another employee noted “how embarrassing it was” to tell clients they had no budget set aside for meals out with them. 

As it is, sellers on Shopee’s platform are comprised of large consumer brands, as well as medium, small, and micro-enterprises. MSMEs, considered the backbone of the country’s consumption-drive economy, comprise 99% of the country’s business enterprises. 

The budget cuts were just the start as the company had started trimming its business, closing shop in its other segments around Southeast Asia. 

Aside from the budget cuts, retrenched employees were enticed into signing agreements that were “hard to refuse”, as one ex-employee quipped. The severance package, they said, numbered in the six-digit territory, which included converted sick leaves, paid vacations, and 13th-month bonuses. 

“The amount was so large that you wouldn’t dare question it,” an ex-employee said. 

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Retrenched employees were told to sit in one-on-one sessions with HR officers to guide them through this disruption. A former employee still found it difficult to understand why they were laid off, saying that it was about inflation and not due to their performance. 

Morale is understandably low, former employees note, as their now ex-colleagues were worried whether their jobs are still safe.

“Overall, I think the morale is very low considering that there are mass layoffs then Shopee decides to announce its endorser for 10.10,” a former employee said, referring to the company’s decision to hire Toni Gonzaga to be the endorser for their new sales campaign, which was met with criticisms online because of her affinity for the Marcos administration.

“The timing is just not right, and honestly a bit insensitive,” the ex-employee added. 

READ: Here’s why Lazada and Shopee are trending on social media at the same time

The exact number of employees that the company laid off in its Philippine segment is unknown, although some former employees estimate that the company axed some 5,000 people in the Philippines, with some hundred people working in operations getting cut. 

Shopee selected employees across different departments based on whether some roles were redundant already, according to former employees. Employees confirmed that most of the customer service department was gutted.

Thank you, Shopee? 

Despite the accelerated turn of events, employees still sang high praises for their former employer. The severance package was generous enough, which attested to the praises surrounding the company’s work culture. 

Ex-employees described working in Shopee’s “people-oriented culture” as “something holding a special place in their heart,” and “life-changing.” 

One employee’s glowing review of the company’s “fun” work culture described them feeling bad after they were laid off. 

Amid all this, the company launched a campaign to connect retrenched staff to different employers. Recruiters and professionals are even reaching out to former Shopee employees in LinkedIn. 

Some former employees interviewed for the story are already on the lookout for their next employment, while some are still mustering the courage to rejoin the labor market. 

“Again, my departure from Shopee enabled and gave me a chance to grow outside of its walls. At least, that’s how I’m looking at the events,” an ex-employee said. 

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