Will all the news around Shopee’s job offer retractions damage its reputation?

Shopee has been making headlines across different media outlets for having to withdraw job offers to several potential employees. It was reported that there were at least a few dozens of job offers that were rescinded in the past two weeks.

Meanwhile, Reuters also reported that Shopee’s sister company, livestreaming app Booyah!, also saw several job cuts as ongoing projects were being shut down. All of these news emerged after Shopee’s parent company, Sea Group, announced a total net loss of SG$1.28 billion in the second quarter of the financial year, more than two times than that of second quarter of the previous year, which stands at SG$599.5 million. Sea Group currently offers three services, comprising of eCommerce platform Shopee, digital entertainment platform Garena, and digital financial service SeaMoney.

While the Shopee brand has undoubtedly positioned itself as a shining star in the Sea group family, earning its position in the minds of consumers as a household brand, communications professionals MARKETING-INTERACTIVE spoke to say that the ongoing news on employment and restructure will have an impact on the brand’s image. 

The recent reports of Shopee rescinding job offers not only affects the company’s reputation negatively but casts a shadow on overall tech space in the region. "Everyone knows that we are going through a phase of economic uncertainty and tough decisions will have to be taken but the expectation from tech giants is to manage sensitive situations with propriety and care," Asiya Bakht, an independent PR consultant, shared with MARKETING-INTERACTIVE.

Commenting on the accounts given by the individuals to media outlets, she said that the depiction of the situation and company has been "ruthless" in withdrawing offers and the interim support has been minimal.

"This is as much a reflection of Shopee’s culture as the financial situation. However, Shopee and Sea can help the situation by proactively communicating about the issue and outlining their policy, specifically steps taken by them to support the people from whom job offers have been withdrawn," said Bakht.

According to the managing director at Socialyse and Red Havas, Kenny Yap, the wider implications on consumers will also be evident as most consumers today are more mindful of the behaviours of the brands they engage with. A Havas Meaningful Brands study found that consumers not only expect better behavior from brands and companies, but are willing to pay more and buy from companies that have a reputation for having a meaningful purpose.

As such, the news has placed a bigger spotlight on the company’s internal communications practices and employee engagement processes. “Employees will probably be worried with the uncertainty, both internally and externally, including company performance and market conditions. These worries may also affect employee performance and output eventually,” he said. “Being a meaningful brand is not just for customers but also for our employees,” Yap added. Therefore, it is important to address these concerns quickly, consistently, and transparently.

Meanwhile, Zeno Group’s Strength of Purpose 2021 study also found that consumers in Asia are 7.9x more likely to purchase from a brand which they perceive to have a strong purpose. Around 81% of millennials and 77% Gen Z consumers felt purpose is much more important today than before.

Explaining the findings further, David Lian, the managing director at Zeno Group’s Growth and Innovation Asia said today, 77% of consumers said they feel it’s important for brands and companies to have a strong purpose today and largely, purpose is defined by these top three values in Asia: honesty, safety, and social responsibility. “Yes, I think there's an impact. APAC consumers defined the three most important elements of a purposeful brand and company as ‘products and services that are created that is a reflection of the needs of the people,’ ‘good treatment of all employees, regardless of rank or level,’ and ‘ethical business practices,’” said Lian, adding:

“In summary, it is becoming really important for companies and brands to see corporate reputation as a dynamic construct that goes beyond advertising or messaging, beyond customer experience, and includes how the company or brand acts as a business, employer and member of society.”

Damage control before the damage

With all the talk of the impending recession, news around layoffs and hiring freezes are no longer uncommon. In fact, many major tech companies from Facebook to Spotify, Netflix, and foodpanda have made the news for their hiring practices. 

In light of this new phenomenon, industry players MARKETING-INTERACTIVE spoke to say that communications teams need to be at the front and centre of these conversations.

“The PR and communications teams should be at the table from the get go to facilitate this so that any company and/or brand gets the tone right, especially when it is about communicating bad news, founder of Progressive Communications, Tarun Deo said. He added that transparency and empathy are critical attributes that most companies need to embrace to be seen in a favourable light even in difficult circumstances.

“Don’t try and brush this under the carpet. That’s something that certainly causes reputational damage in both the short and long term,” added Deo.

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