ShareChat Fires 20% Workforce Months After Raising Rs 2,000 Crore
The company said it needs to "prepare to sustain" through "external macro factors that impact cost and availability of capital."
Mohalla Tech Pvt., the parent of social networking app ShareChat and the short video app Moj, has laid off about 20% of its workforce, equating to about 500 employees.
The company said it needs to "prepare to sustain" through "several external macro factors that impact the cost and availability of capital."
"The decision to reduce employee costs was taken after much deliberation and in light of the growing market consensus that investment sentiments will remain very cautious throughout this year. At the same time, we are doubling down on our efforts behind advertising and live-streaming revenues," a Sharechat spokesperson said in a statement to BQ Prime. "With these changes, we hope to sail through the uncertain global economic conditions of 2023 and 2024 and emerge stronger."
"As capital becomes more expensive, companies need to prioritise their bets and invest in the highest-impact projects only," the spokesperson said. "Over the last six months, we have aggressively optimised costs across the board, including in marketing and infrastructure, among other cost heads, and stepped up our monetisation efforts."
The company confirmed that it will pay the total salary for the notice period and allow employees to retain all vested ESOPs, and the options will continue to vest as per schedule up until April 30.
The layoffs come about seven months after it closed a large, two-tranche funding round through which it raised a total of $520 million (around Rs 4,230 crore), bringing the valuation to $5 billion (around Rs 40,680 crore). In the second tranche closed in June, the company had raised $255 million (Rs 2,000 crore) from Google, Times Group, and Temasek.
ShareChat has now become the latest in a series of VC-backed companies that have cut jobs in an attempt to reduce spending as access to capital tightens. Earlier, Byju's, Ola, ChargeBee, Unacademy, and several others had done the same, while globally, Twitter, Meta, and Amazon have laid off large numbers.