Tech layoffs to digibanks: 10 headlining events in S’pore’s tech and business scene for 2022

This year has seen the recovery of many sectors, from the travel industry to the entertainment industry as Singapore opens its borders post pandemic. When it comes to the tech and business landscape, however, some industries have gone through a rough ride.

With the year drawing to a close, here are some notable tech and business headlines that have swept Singapore over the year:

1. Sea Limited’s top management forego salaries, exits markets

The recovery from the pandemic has been rocky. Faced with turbulent market conditions such as rising costs due to inflation and weak economic growth, businesses are finding it hard to stay afloat.

One such company struggling in the face of these economic challenges is tech giant Sea Limited. The company, which saw its market value soar to more than US$200 billion last October due to the popularity of its gaming unit Garena and e-commerce unit Shopee during the pandemic, had its shares tumble since then and is now worth just US$35 billion.

Aiming to be cashflow positive, Sea’s founder and CEO, Forrest Li, announced in September that the company’s top management will cease to receive compensation until the business becomes profitable and self-sufficient as investors are fleeing for ‘safe haven’ investments.

A week before Forrest Li’s announcement, Shopee reportedly exited Argentina and shut its local operations in Chile, Colombia and Mexico. The e-commerce unit also pulled out of France, Spain and India within months after launching operations in those markets.

In addition, Shopee axed its employees in three rounds of layoffs this year, with its latest round of layoffs carried out in November. Prior to this, it fired three per cent of its workforce in Indonesia in September, as part of its regional job cuts which affected a number Singaporeans.

It let go of more staff earlier this year and made headlines for withdrawing multiple job offers based in Singapore.

Meanwhile, Garena also laid off hundreds of staff in Shanghai and saw its revenue decline as Free Fire, Sea’s most lucrative survival shooting game, was banned by the Indian government in February. Free Fire raked in more than US$4 billion by 2021 since its release in 2017, according to research firm Sensor Tower.

2. Zilingo’s string of high profile departures

Co-founded by Ankiti Bose and Dhruv Kapoor in 2015, Zilingo is a tech startup that provides tech solutions to small fashion vendors across Southeast Asia.

The platform, inspired by Bangkok’s Chatuchak weekend market, offered e-commerce integrations for these fashion vendors, allowing them to track inventory operations, launch their own websites, and manage their marketplaces.

The company went from launching operations in the US to almost becoming a unicorn startup — until its former Chief Executive Officer (CEO), Ankiti Bose, was suspended from her post. An investigation into Bose’s management was launched as several financial irregularities as part of a due diligence investigation for Zilingo’s new funding round with Goldman Sachs

Following her suspension, Zilingo fired Bose in May and considered legal action against her. However, Bose denied all charges and expressed her disappointment on social media.

The company also lost their Chief Financial Officer Ramesh Bafna despite being a frontrunner to take over Bose’s position as Zilingo’s CEO. In addition, Zilingo’s head of PR and communications Naushaba Salahuddin was dismissed around the same time.

A few months later, its Chief Operating Officer, Aadi Vaidya, tendered his resignation.

Currently, Zilingo is being led by Kapoor, who has been trying to keep the company afloat. The company nearly avoided liquidation as the board authorised US$40 million in a loan repayment to creditors in June.

3. Crypto companies crash into bankruptcy

This year has been a whirlwind for the crypto industry. Faced with a crypto winter, these companies have been raking in huge losses — the industry that was previously valued at US$3 trillion last year now sits at US$900 million.

The Terra-Luna crash which occurred earlier this year in May cause a domino effect, raking through the whole crypto space. Companies like Celsius and Three Arrows Capital were collapsing because of their investments in Luna, and there were even cases of suicide after people lost large sums of money from the crash. 

Over his role in the crash, Terraform Lab’s Do Kwon was served with a number of lawsuits, with the latest being a US$56.9 million lawsuit in Singapore.

Another shock to the crypto ecosystem came on November 8, with FTX, one the largest cryptocurrency exchanges by trading volume, halting withdrawals. To help relive the pressure around the exchange, Binance signed a non-binding Letter of Intent intending to fully acquire FTX.com.

However, citing reports on mishandled customer funds and alleged US agency investigations, Binance backed out of the acquisition, forcing FTX to file for bankruptcy. As the cryptocurrency exchange collapsed, its investors, such as Temasek Holdings, marked down their investment to zero.

Just yesterday (need to mention the date), FTX founder Sam Bankman-Fried was charged and denied bail by the US authorities with “one of the biggest financial frauds in US history“.

Despite the bleak outlook of the crypto industry, young Singaporeans still believe that the crypto industry has potential — close to one in five (18 per cent) of Singaporeans in their 20s are invested in cryptocurrencies.

4. Hodlnaut suffers losses after Terra-Luna crash

Founded by a graduate from the Singapore Management University Zhu Juntao and Simon Lee, Singapore-based cryptocurrency borrowing and lending platform Hodlnaut was one of the casualties of the Terra-Luna and FTX crashes.

The company was granted an in-principle approval by the Monetary Authority of Singapore (MAS) for Major Payment Institution Licenses under the Payment Services Act earlier in March.

In August, just a few months after the Terra-Luna crash, Hodlnaut announced that would be halting withdrawals, token swaps and deposits due to losses suffered by Hodlnaut’s Hong Kong subsidiary during the TerraUSD crash. The company also informed MAS to withdraw its lisence application.

Following its freeze of fund withdrawals, the company laid off 80 per cent of its employees (approximately 40 people) in an effort to reduce the company’s expenditure and was placed under Interim Judicial Management.

A couple of months later in October, a Singapore court report disclosed that Hodlnaut has been hiding some documents from the interim judicial managers (IJMs), where over 1,000 files from Google Workspace were deleted after the IJMs were appointed.

In addition, the IJMs also confirmed on November 11 that 25 per cent of Hodlnaut’s assets are held on centralised exchanges and of that, about 72 per cent of S$18.5 million were parked with FTX — which filed for bankruptcy on the same day. The company attempted to get the assets out from FTX before it suspended withdrawals two weeks prior but failed to do so.

Most recently, the Commercial Affairs Department announced on November 23 that it would be investigating Hodlnaut and its directors as it had received reports alleging that Hodlnaut and/or its directors had made false representations relating to the company’s exposure to the Terra/Luna digital token ecosystem.

5. Teo Heng KTV resumes its nightlife business

Family-friendly, budget KTV studio Teo Heng KTV was founded in back in 1989 by Jackson Teo. Starting out with just five rooms, the KTV studio managed to expand to 14 outlets across the island.

Despite achieving great success, the family business was struggling to stay afloat amidst Covid-19 due to lockdown restrictions — forcing the business to halt its operations and retrench 120 of its employees.

With zero income and many bills to pay, their financial burden eventually snowballed, causing them to be “heavily in debt”. According to Jackson, his business is expected to incur a loss of S$500,000 for a month-long closure.

After four months of halting its operations, Teo Heng made the move to close down half of its outlets to lessen the burden. Six months later, in January last year, the business made a shocking announcement that it would be “leaving the industry for good” but this exit is only a “temporary move”.

In March 2021, as the Covid-19 situation stabilised in Singapore with more Singaporeans getting vaccinated, the business announced the reopening of some of its outlets to diversify its revenue streams — however, these outlets have been repurposed to serve as a space for customers to “work, dine and chill”.

After two whole years of business closure, Teo Heng was finally allowed to resume their karaoke business in April this year after the government lifted its Covid-19 restrictions on nightlife establishments. The company was left with only four outlets.

Although met with a surge of demand from its customers after its long period of closure — their outlets have been fully booked since their opening — the revenue Teo Heng earned has only managed to clear “about 50 per cent” of its eight-figure debt as of August. The business also ramped up its hiring to employ over 50 workers, up from its initial pool of 32 due to Covid-19.

Teo Heng aims to open at least 10 outlets and double the headcount of its employees to 100 by next year. Earlier in August, it launched a new outlet at Kallang Wave Mall, and has just recently launched another one at White Sands mall this month.

After Chinese New Year next year, Teo Heng has plans to open another outlet at The Centrepoint.

6. Reebonz rebrands, delves into livestreaming after acquisition

Founded in 2009 by three Singaporeans, luxury e-commerce marketplace Reebonz was cast into the spotlight last year when it filed for liquidation after racking up multimillion-dollar debts.

The company has been bleeding cash over the past few years due to debt and declines in valuation, reporting negative operating loss as far back as 2013. Besides that, it also faced issues such as the high costs of operating physical stores, the usage of a capital-intensive model to buy goods, and the changing preferences of consumers.

In a bid to pay off these debts, Reebonz also put up its eight-storey e-commerce hub at Tampines North worth S$40 million for sale October last year.

Following its voluntary liquidation, Reebonz has since saw a change in ownership. The luxury e-commerce marketplace announced on its Facebook page that B2B marketplace LiveCommerceEntertainment (LCE), has acquired “all brand assets of Reebonz.com” and that the company will operate under a new management.

Rebranding the luxury e-commerce marketplace to ReebonzLIVE, LCE said that it will manage and operate the marketplace’s Facebook and Instagram channels and bring daily live-selling shows directly from Italy and Europe.

7. Singapore sees The Great Resignation

Last December, a poll by jobs portal Indeed revealed that one out of four Singapore workers are planning to leave their current employer in the first half of 2022. About half of the 1,002 workers surveyed in Singapore were unsure if they would remain in their current roles in the next six months, suggesting a ‘Great Resignation’ trend in 2022.

Ernst & Young’s 2022 Work Reimagined Survey reported a higher percentage of Singaporeans prepared to quit their jobs in the next 12 months, standing at 51 per cent.

Post-pandemic, employees feel more burdened at work. A separate study done by The Straits Times found that one in two employees have clocked in more working hours since the pandemic started, with a third putting in more than two hours extra daily.

Besides additional work hours, increased workload and stress are putting a strain on employees’ mental health. It’s no surprise that more and more employees are leaving for better jobs that value their wellbeing and time.

In fact, SAP polled 1,363 small and medium business leaders across Asia-Pacific and Japan (APJ) about resignations and found 62 per cent of its respondents agreeing that more employees are resigning as compared to last year in Southeast Asia.

Aside from this, as more Gen Zs and millennials join and make up Singapore’s workforce, there has been an increase in job-hopping. Valuing a holistic work environment, work-life balance and wanting to climb the ladder fast, these generations resort to job hopping to fulfil their career needs.

8. NOC’s Ryan Tan denies responsibility for crypto crashes

Ryan Tan, widely known as the co-founder of Singaporean production company Night Owl Cinematics (NOC), was embroiled in controversy surrounding the crypto space, shortly after the dispute around the company’s workplace practices died down.

A journalist from TechInAsia published an exposé on the influencer, where the journalist criticised Ryan for not having enough knowledge on the crypto space to shill coins to followers.

Ryan got into the crypto space in late 2021, and begun sharing his experience in NFTs and play-to-earn (P2E) games on Instagram just after two weeks of his foray into the space.

The influencer also shared a link for his followers set up accounts on crypto wallet Metamask as well as two other centralised crypto exchanges. In addition, Ryan also created Telegram groups for followers to get into crypto under his guidance.

According to the report from TechInAsia, since the time Ryan first invited followers to invest their money into the two P2E games he promoted, both tokens have crashed. He also refrained from posting about them, and never made appearances in the crypto-related Telegram channels he ran.

When the influencer was confronted about his actions earlier in the year after the first crash, he maintained that any losses were not his fault — he had only shared his own thoughts and opinions on these games, denying responsibility for his endorsement of the P2E games.

9. Digital banks arrive on Singapore’s shores

Back in December 2020, MAS awarded digital bank licenses to four contenders — digital full bank licenses were awarded to a Grab-Singtel consortium and Sea Limited, while Ant Group and a consortium led by real estate developer Greenland Financial Holdings were awarded with digital wholesale bank licenses.

Fast forward to today, these four contenders have launched their digital banks in Singapore, with a common goal to target underserved segments in an already well-banked market.

GREEN Link Digital Bank (GLDB), owned by the consortium led by Greenland Financial begun its operations in Singapore on June 3, becoming among the first digital bank licensees to launch here. The digital bank serves micro, small and medium-sized enterprises (MSMEs) with banking and financial services.

On June 6, ANEXT, a digital wholesale bank and subsidiary of Ant Group, was soft launched. The move is part of Ant Group’s expansion plans into Southeast Asia.

ANEXT aims to provide funding to small and medium-sized enterprises (SMEs) in the region, particularly those engaging in cross-border trade. 

Meanwhile, GXS Bank, backed by the Grab-Singtel consortium, was Singapore’s first digital bank to launch on August 31, serving consumers and businesses. It currently offers the GXS Savings Account, designed to address the gaps that hinder consumers such as those who are gig economy workers, self-employed entrepreneurs, and early-jobbers from reaching their saving goals.

Among the awardees of these digital bank licenses, Sea Limited is yet to make any announcement regarding the launch and offerings of their digital bank. According to The Edge, when it first got the licence back in 2020, Sea Limited CEO Forrest Li said the bank — dubbed MariBank — seeks to address the underserved financial needs of young consumers and SMEs in Singapore.

Besides these contenders, Trust Bank, the product of a unique joint venture between Standard Chartered and FairPrice Group, was launched on September 1. The digital bank had 100,000 customers signing up in the first 13 days of its launch, and over 300,000 customers in its first two months.

10. A shift from The Great Resignation to The Great Layoffs

Despite more Singaporeans wanting to change jobs and tender their resignations this year, just like Sea Limited, other tech companies are feeling the heat from unstable economic conditions.

These tech companies faced an upsurge in online activity during Covid-19, which led them to pursue unsustainable growth models, hiring and expanding beyond their capabilities. Once the tech bubble burst, these companies were forced to downsize — currently, 964 tech companies have retrenched 149,876 of their employees globally.

The waves of retrenchment have reached Singapore’s shores as well, with employees being axed from major tech players.

Facebook owner Meta Platforms laid off 11,000 employees, or 13 per cent of its global workforce last month — and 50 of the affected positions were based in Singapore. Besides Meta, Amazon, Microsoft, and Stripe have laid off employees based in Singapore as well.

Besides tech giants, the rapid fall of crypto prices, the FTX and Terra-Luna crashes, an implosion of crypto platforms and high interest rates have discouraged investors from wading into risky investments — causing crypto companies to enact layoffs to cut costs and curtail their plans for growth.

Digital asset trading platform Coinbase Global, who aggressively hired to take advantage of the crypto craze, laid off 60 of its employees in its latest series of retrenchments. Prior to this, in June, Coinbase laid off about 1,100 employees, reducing its workforce by 18 per cent and implemented a hiring freeze.

Featured Image Credit: Sea Ltd/ Teo Heng KTV/ Mint/ GXS Bank/ Reebonz/ Bloomberg