Forrest Li on pivotal moments that helped turn Sea Group around

Image credit: Timmy Loen

Sea Group is set to release its Q1 2023 earnings report tomorrow. Last week, CEO Forrest Li sent out the following memo announcing a 5% salary increase to all full-time staff.

He, however, cautioned that the storm might not be over for his “high-speed” sailing teams.

See also: Sea Group’s triple win: how it pulled off a stunning reversal

Here’s the full text of the memo, which has been slightly edited to align with Tech in Asia‘s style standards:

Last September, I wrote to you about the need for us to pivot to achieving self-sufficiency as the highest priority across the entire organization. I expected that it would take us 12 months to 18 months to do it.

I am incredibly proud to share with you today, just eight months later, that we have achieved self-sufficiency. We are a profitable company now, and our cash balance is increasing rather than decreasing each quarter. This is a big milestone for all of us, and much earlier than expected!

This past year was probably the most difficult period in the history of our company. I think back to the time when we made our first major withdrawal decision: exiting Shopee from India. We had started to realize that the external environment might not be able to support our ambitions. The leadership team debated, many times, whether to exit or keep pushing on.

Around this time, I came down with Covid. It was a bad infection, and I could not get out of bed for several days. With a high fever and constant coughing, it was difficult to think about anything else. But I discovered that I could not put this issue out of my mind.

It slowly became clear to me that this was not just a decision about one market: The global environment was changing in fundamental ways, and we may need to pivot our entire strategy. The implications of this were enormous. We were a large ship sailing at high speed – what would it take if we needed to turn it quickly?

In business, you must hope for the best but plan for the worst. We exited India but hoped that the external environment would improve. Instead, it got worse, and we had to make more difficult decisions. We pulled out of more markets and downsized in others. We shelved projects; we reduced our team sizes. We cut back on perks, froze salaries, and reduced bonuses.

I found the people decisions the hardest, even more than the business decisions. One weekend, Ye Gang, Qunfeng, and I sat in the empty office discussing the cuts we had to make to Qunfeng’s team. We talked about it logically and set down what we needed to do. We knew that this was going to have a big impact, not just on our employees but also on their families. I felt like I had let our people down.

Looking up, I saw that we all had tears in our eyes. I realized they must have felt the same way too. But we didn’t speak of it – the decision had to be made. We stood up and parted, each knowing what we had to do. To this day, the three of us have never spoken about that moment.

I mention these painful memories because, when I look back, they tell me what the hardest but most important part of our journey through this crisis has been. It was committing to decisions that we did not like, that we did not want, but that we knew were the right things to do to save the company.