The Indian social media startup, ShareChat laid off 20 per cent of its workforce on Monday. Google and Twitter-backed company said it needs to let go of its employees as it prepares to sustain “several external macro factors that impact the cost and availability of capital”. Reportedly, the move will affect 500 to 600 employees.
The move comes just a month after the company shut down its fantasy sports gaming platform, Jeet11 and laid off close to 100 employees. ShareChat parent acquired Jeet11 in February 2020. The app allowed registered users to play fantasy sports like cricket, football, kabaddi, etc.
“Since our launch eight years ago, ShareChat and our short video app Moj have seen incredible growth. However, even as we continue to keep growing, there have been several external macro factors that impact the cost and availability of capital,” a company spokesperson in a mail to employees, reports TechCrunch.
“We are sharing this note, along with other relevant details, on the personal email IDs of our colleagues who are impacted by this. Those of us reading this on our personal mail IDs would find Slack and company email inaccessible. I realize that this sudden revoking of access is not the ideal experience. We debated a lot about it, but this was the only practical solution,” the company said in an email reviewed by Mint.
“Keeping these factors in mind, we need to prepare the company to sustain through these headwinds. Therefore, we’ve had to take some of the most difficult and painful decisions in our history as a company and had to let go of around 20% of our incredibly talented employees who have been with us in this start-up journey,” the mail added.
As part of the severance package, the laid-off employees will receive the total salary for their notice period and two weeks’ pay as ex gratia for every year they served the startup. The affected employees will also get 100% of the variable pay until December 2022 and their health insurance policy coverage will remain until the end of June, the startup confirmed. ShareChat also let ESOPs of its affected employees continue to vest per their schedule up until April 30.
Mohalla Tech is the parent company of the social media platform ShareChat and the short video platform Moj. In FY22, the company recorded losses worth Rs 2,569, double compared to Rs 1,460 crore it recorded in the previous year. Currently, the company is valued at $5 billion, and has more than 2,200 employees. It has raised over $1 billion in over 15 funding rounds, according to Crunchbase.