Carsome feels weight of tough financial results

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As investor confidence slowly found its feet after the 2008 global financial crisis, it looked like growing but loss-making tech companies could get away with a bleak earnings report or two. Businesses that relied on economies of scale were given time to blossom. But those were the good days of a raging bull market.

With inflation soaring and more interest rate hikes to come, the bears have taken over for now.

Investors have taken a tougher stance toward unprofitable firms, and the repercussions of poor financial performance is almost immediate. Just take Sea Group, for example, which has undergone a catastrophic loss in stock value of more than 80% over the last year.

Since posting dismal quarterly results in August, the tech giant has downsized its ecommerce division, Shopee, across Singapore, China, Indonesia, Philippines, Taiwan, Malaysia, Chile, Colombia, Mexico, and Argentina.

Amid cash flow struggles, Sea’s leadership team even agreed not to take any cash compensation until the Singapore-based firm reached self-sufficiency.

Now, in an almost identical state of affairs, our featured story highlights unprofitable used-car platform Carsome letting go of up to 10% of its staff soon after disclosing a far-from-ideal report for the financial year ended December 31, 2021. The executive leadership team of the Malaysian unicorn will also be forgoing their salaries for the rest of 2022.

Today we look at:

• The job cuts at Carsome
• Crypto lender Nexo on the hunt for deals in Asia
• Other newsy highlights such as Terraform Labs co-founder Daniel Shin set to testify and ByteDance’s intensifying healthcare plans.

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Image credit: Timmy Loen

Streamlining, restructuring, rightsizing, and cost cutting are just a few euphemisms that companies around the world use to signal mass job cuts are incoming. Carsome opted to bring down the layoff axe through an “employee base optimization” exercise.

While firms understandably try to protect their image and reputations in any way possible, especially when carrying out job cuts, I find it slightly insensitive (even if that is not the intention) to sugarcoat something that is going to strip a person of their employment and, in some cases, their livelihoods.

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