Shopee quietly lays off employees! The parent company is fully pushing toward AI—why cut engineers first instead of other positions?

Shopee’s parent company, Sea Group, quietly laid off hundreds of engineers, accounting for about 8% of the development team. The move is intended to respond to core business competition, reduce traditional headcount, and fully push into the AI field—but why is this round of layoffs prioritized for engineers?

Shopee development team cuts 8%, quietly streamlining headcount

As the well-known shopping platform Shopee preparing for the 618 Shopping Festival, its parent company has quietly laid off hundreds of employees this week.

According to Bloomberg, Shopee’s parent company, Sea Ltd., cut hundreds of developers this week, affecting about 8% of the development team’s headcount. Headquarters staff began receiving termination notices on June 8. The impacted roles mainly include software engineers and quality assurance (QA) positions in product and engineering teams.

Shopee’s layoffs this time did not hold an all-hands meeting. Employees only learned about the layoffs after colleagues lost access to their work account rights. Through individual interviews, the human resources department informed staff, and the severance plan was N+2, meaning one month’s salary for each year of service, plus an additional two months of salary.

Shopee’s spokesperson also responded to the layoffs, saying that the company regularly evaluates organizational staffing and makes adjustments according to operational priorities.

Shopee’s parent company races to capture the market, aiming for a trillion-dollar valuation

Shopee’s layoffs are closely tied to Sea Group’s strategy to develop AI. According to Singapore media CNA, in an employee memo for 2025, Sea Group CEO Li Xiaodong mentioned that if the company fully increases investment in AI and makes the right decisions, it may be able to achieve a market valuation target of $1 trillion in the future.

To find new engines, Sea Group continues to expand its AI investments. In addition to integrating AI technology in partnership with Google in February this year, it also established an AI Center of Excellence in Singapore in April. Financial reports show that in the first quarter of 2026, Sea Group’s operating expenses rose 43.4% year over year to nearly $2.6 billion, but net profit still increased 6.7% year over year to $438.2 million.

Image source: Flickr, Choo Yut Shing Photography. In the 2022 Lunar New Year, Shopee’s event at Smith Street China Town in Singapore

Why are Shopee’s layoffs targeted at engineers first?

This round of layoffs at Shopee prioritizes engineers, reflecting a structural shift after AI is introduced in the tech industry.

The tech sector is concerned that AI will reduce reliance on traditional software tools and erode the enterprise IT services market. Although AI has not yet translated into clear benefits, companies are, to cope with competition, seeking ways to accomplish more with fewer people.

After Sea Group’s market value peaked at about $116 billion in September 2025, its stock price has faced a sharp correction due to factors such as 2026’s rising oil prices suppressing consumption and driving up costs.

With core business competition intensifying, both Shopee and large players such as Alibaba have indeed chosen to scale back traditional engineering headcount and accelerate AI investments to catalyze growth.

However, after reports of major layoffs at U.S. tech companies such as Block, founded by Twitter founder Jack Dorsey, as well as Oracle and Meta, there has also been debate in the market about whether companies are only using AI as a pretext to cover up the fact that they simply want to streamline headcount.

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