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A month after ShareChat, the Indian social media startup backed by Twitter, Google, Tiger Global and Temasek, cut 20% of its workforce – or more than 400 employees – in more than 100 roles.
The startup informed its employees of the decision on Monday morning. It disables access to accounts and wipes out all data of affected employees, a person familiar with the development told TechCrunch.
In December, ShareChat laid off nearly 5% of its 2,300 employees following the shutdown of the virtual sports platform.
Announcing the new decision to employees, ShareChat CEO Ankush Sachdeva said in an internal memo that the move was to “ensure the financial health and longevity” of the startup. The executive said the startup “estimated market growth at high growth rates by 2021 and underestimated the duration and intensity of the global liquidity squeeze.” The memo and the sacking were first reported by the Economic Times of India.
A ShareChat spokesperson confirmed the layoffs in a statement to TechCrunch, saying the decision was made “after much discussion and given the growing market consensus that investment sentiment will remain very cautious throughout this year.”
“Since our launch eight years ago, ShareChat and our short video app, Moj, have seen phenomenal growth. However, as we grow, there are a number of external macro factors that impact our cost of capital and availability,” the spokesperson said.
“With these things in mind, we need to prepare the company to weather these headwinds. So we made one of the most difficult and painful decisions in our history as a company, letting go of 20% of our incredibly talented employees who have been with us on this startup journey.”
The spokesperson also said that the startup has “significantly improved spending across the board on marketing and infrastructure, among other spending heads, and strengthened our monetization efforts.”
Exact details about which roles will be affected have not been revealed.
Injured employees will be paid their full salary for their notice period plus two weeks’ pay for each year of service as an advance payment. Employees will get 100% of variable pay until December 2022 and their health insurance policy coverage will last until the end of June, the startup confirmed.
The initiative will allow affected employees to continue vesting in their ESOPs as scheduled until April 30.
We are doubling down on our efforts behind advertising and live streaming revenues. With these changes, “We aim to sail hard in 2023 and 2024 amid uncertain global economic conditions,” the spokesperson said.
According to Crunchbase, ShareChat has raised more than $1 billion in more than 15 funding rounds, including its Series H funding of $300 million in May last year.
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