Sea Ltd.’s Shopee is cutting hundreds of developer jobs globally, joining rivals across the world in slashing staff while they adopt AI in the workplace and develop new services based on the technology.

The reductions, which started this week, amount to about 8% of Shopee’s developer workforce, according to people familiar with the matter. They affect roles such as quality assurance and more cuts might follow, the people added, asking not to be identified, discussing private information.

It’s unclear if the move is directly tied to Sea’s forays into artificial intelligence. But they coincide with a growing debate about the impact of the technology on jobs across the world, as well as discussions around potential "AI-washing” in the wake of major layoffs at Jack Dorsey’s Block Inc. as well as Oracle Corp. 

Many tech companies hired aggressively during the pandemic, when online and digital activity boomed and firms struggled to keep pace. At the same time, concerns are growing that AI will reduce a reliance on traditional software tools, eroding the lucrative business of enterprise IT services. While AI hasn’t yet translated into clear productivity gains, many companies are seeking ways to do more with less.

Sea, the operator of online retailer Shopee and the Garena gaming platform, is making structural shifts after Chief Executive Officer Forrest Li declared that a trillion-dollar market capitalisation was possible if his company doubled down on AI. It joins a growing number of companies like rival Alibaba Group Holding Ltd. that are investing in AI to catalyse growth while competition in their core business intensifies.

A Sea spokesperson said the company regularly reviews and adjusts its staffing needs. "These decisions are always made after careful consideration. For colleagues affected by any changes, we are committed to providing support during this period of transition.”

The company’s stock has taken a beating since September, when it was valued at roughly $116 billion - after this year’s surge in oil prices dampened consumer sentiment and inflated the cost of operations. Investors are now scrutinising its growth trajectory.

So far, Sea has been embedding AI in small ways like through product recommendations and seller tools.

In February, it said it would work with Alphabet Inc.’s Google to integrate AI across its operations - including developing AI shopping agents. It has also set up dedicated teams to scout for new investments in the new technology, people familiar with the matter said in May, as the Singapore-based company hunts for its next growth engine beyond e-commerce. - Bloomberg