Sea taking the right step towards restructuring sooner than later

While Sea could have handled the situation differently, layoffs and restructuring are corrective mechanisms for firms to cope with economic circumstances and strategic planning, and Sea is taking the right step by stopping the bleeding sooner rather than later, said Ms Ng.

Sea has been growing really fast the last few years, they were going for growth and efficiency. She noted that restructuring is something that happens every year, as we have seen in Chinese tech companies.

Sea is taking steps to make sure they have enough buffer. If Sea had waited two or three more years, the restructuring would have been a lot more painful than now. Many tech companies expanded rapidly during the pandemic, as consumer behaviour changed dramatically with the lock downs.

Consumers who could no longer shop in physical stores turned to e-commerce, movies at cinemas were replaced by streaming services, and companies swapped boardrooms for video conferencing solutions.

There's a whole tech boom that is unique to the Pandemic. Asst Prof Ng said that tech companies had a growth at all costs mind set which resulted in mass hiring and spending.

Geopolitical tensions fuelling higher prices and consumers gradually returning to brick- and mortar retailers after the easing of pandemic restrictions has changed the environment to one that no longer supports growth at all cost strategy, he said.

He said companies have to grow with profits.

The era of economic uncertainty has led to tech companies becoming more cautious and rethinking their strategies, said Ms Ng.

With the escalating war in Ukraine and the looming fears of a global recession, firms need to brace for a longer impact on drying funds, rising costs and dwindling consumption power.

I think companies like Grab and Sea still have a healthy runway a few years more of cash burn to go. They are becoming more prudent now, I think. I think they are thinking, Well, I have one or two years of runway, I don't know what will happen, so let's do something now, she said.

As demand for tech talent exceeds supply in Asia, job seekers with relevant skills are highly sought after by the tech sector, according to consulting firm Mercer.

According to a report by recruitment agency Robert Walters, recruitment trends are focused on technology. There is a high demand for talent in artificial intelligence AI machine learning, cyber security and e-commerce.

There is an increasing appetite for technology and innovation courses, and heightened interest in entrepreneurship among the young, especially in those whose specialisations are not in business, said Asst Prof Ng.

According to my observations, the increasing demand for classes, courses, networking opportunities for entrepreneurship, cross- faculty collaborations, and more are increasing on a scale that we haven't seen before, he said.

Engineering students, science students who want to reach beyond their hard skills, are some of the students who want to dabble in something else. I think that kind of inquisitiveness is great. Ms Ng said that Singapore as a whole pushes the boundaries to innovate in the technology space, a key setback for some tech employees is an unwillingness to think outside the box.

She said that the Mindset is really important, and that is why she said, Number one, push the boundaries. Two, logical thinking. This is something that I think we will learn in school, but until you try and use it daily, it's something I see missing in a lot of people, she said.