Alibaba Competitor Downsizes Gaming Arm Worforce Again

Sea Limited SE slashed the workforce in its money-making gaming arm, marking its second such attempt in 2022 to contain costs as it struggled for growth, Bloomberg reports.

The move follows Sea's dismal quarterly results. In June, Sea's e-commerce arm Shopee laid off staff across multiple markets.

Sea scaled back its overseas footprint and periphery businesses as rising competition and investor skepticism forced the company to shift focus toward boosting profitability.

Sea explored cutting headcount in its most profitable division Garena and new ventures at its R&D arm. Sea aimed to cut 40 jobs from its game livestream app Booyah!, including in product management and quality assurance teams.

Sea also aborted several experimental ventures at its R&D unit Sea Labs. It will release a dozen employees working in public cloud and blockchain areas. Sea has retracted job offers across tech roles at its e-commerce arm Shopee.

Sea faced increasing pressure to cut costs as growth in its main e-commerce business took a back foot after a pandemic-era high. It has lost almost $170 billion of its market value since an October high. 

Sea expected Garena to post its first booking decline this year and withdrew its 2022 e-commerce forecast. Consumers pulled back on online spending as rising interest rates and prices weighed on the economy.

Contrastingly, Alibaba Group Holding Limited's BABA Lazada Group accelerated its investments across Southeast Asia.

Sony Group Corp SONY also remained aggressive on gaming prospects despite weaker quarterly results. However, Meta Platforms Inc (META) Facebook braced to close down its Facebook Gaming app as it failed to gain traction.

Price Action: SE shares traded lower by 1.89% at $60.16 in the premarket on the last check Friday.