ShareChat, the Indian social media startup backed by Twitter, Google, Tiger Global and Temasek, has laid off 20% of its workforce — or more than 400 employees — just a month after eliminating more than 100 positions.
The startup informed its employees about the decision on Monday morning. It disabled access to accounts and destroyed all data on affected employees, a person familiar with the development told toptecheasy.com.
In December, ShareChat laid off nearly 5% of its 2,300-employee workforce as a result of shutting down its fantasy sports platform Jeet11.
Ankush Sachdeva, CEO of ShareChat, briefed his employees on the new decision, saying in an internal note that the move was to “ensure the financial health and longevity of the startup.” The director also noted that the startup “overestimated market growth in the 2021 highs and underestimated the duration and intensity of the global liquidity crunch.” The note and the resignation were first reported by the Indian newspaper Economic Times.
In an emailed statement to toptecheasy.com, a ShareChat spokesperson confirmed the resignation, saying the decision was made “after much deliberation and in light of growing market consensus that investment sentiment will remain very cautious this year.”
“Since our launch eight years ago, ShareChat and our short video app Moj have experienced incredible growth. But even as we continue to grow, there have been several external macro factors impacting the cost and availability of capital,” the spokesperson said.
“With these factors in mind, we need to prepare the company to weather these headwinds. As a result, we have had to make some of the most difficult and painful decisions in our history as a company and let go about 20% of our incredibly talented employees who have been with us on this start-up journey.”
The spokesperson also claimed that the startup had “aggressively optimized costs across the board, including marketing and infrastructure, among other cost items, and ramped up our revenue generation efforts.”
Exact details about which roles will be affected have not been disclosed.
The affected employees will receive total pay for their notice period and two weeks of pay as an ex gratia for each year they have served the startup. The employees will also receive 100% of variable pay until December 2022 and their health insurance will remain valid until the end of June, the startup confirmed.
The startup is also letting ESOPs of affected employees vest until April 30 on their schedule.
“We are redoubling our advertising and live streaming revenue efforts. With these changes, we aim to sail through the uncertain global economic conditions in 2023 and 2024 and emerge stronger,” said the spokesperson.