Layoffs at ShareChat to affect 600 employees
2 min read 16 Jan 2023, 11:30 PM ISTMohalla Tech, which runs social media platform ShareChat and short video platform Moj, laid off around 20% of its employees due to ‘external macro factors’
PremiumMohalla Tech Pvt. Ltd, which runs the social media platform ShareChat and short video platform Moj, on Monday laid off around 20% of its employees due to “external macro factors" impacting the cost and availability of capital.
This will affect 500 to 600 employees, a person familiar with the development said, asking to remain anonymous.
ShareChat employees received an email on Monday morning about the impending layoffs.
“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," chief executive officer and co-founder Ankush Sachdeva said in the email reviewed by Mint.
The affected employees lost access to Slack by 6am and received an email from Sachdeva on their personal email IDs around 8am, a (now) former employee said.
The company took the call to cut off access abruptly to protect sensitive information, the email said.
Sachdeva said that Google-backed ShareChat was one of the first startups to take proactive measures by ‘sharply reducing’ user acquisition, marketing and server spending while raising additional funding.
It ‘put in a guardrail of flat headcount in May’ and executed its annual operating plan ‘with much lesser than planned bandwidth’.
“However, this was clearly not enough. There is a growing market consensus that the current global economic downturn would be a much more sustained one," the note to employees said.
“In hindsight, we overestimated the market growth in the highs of 2021 and underestimated the duration and intensity of the global liquidity squeeze," the email added.
Sachdeva said the company evaluated and arrived at a smaller list of projects for 2023, which were high-return-on-investment projects.
“The smaller list meant we had to shut down some of our running workstreams while investing more in others. This led to several existing roles becoming redundant," the email to employees said.
For ShareChat, the latest round of layoffs comes after parent company Mohalla Tech shut its fantasy sports vertical Jeet11, laying off close to 115 employees, earlier last month.
“We need to prepare the company to sustain through these headwinds," a company spokesperson said in a statement.
ShareChat will provide financial packages such as two weeks’ pay as ex gratia for every year served with the company in addition to a notice period salary; impacted employees will retain their laptops and other health insurance benefits till June 2023.
Employees can expect their variable pay till December end, the email to employees said.
Further, impacted employee stock options that vest till 30 April 2023 will be retained by the employee.
Last month, Ajit Varghese, chief commercial officer at ShareChat, stepped down after his two-year stint.
ShareChat was founded in 2015 by Farid Ahsan, Sachdeva and Bhanu Pratap Singh.
The firm launched Jeet11 in February 2020 to take on the popular gaming fantasy gaming platform Dream11, allowing users to bet on cricket and football matches.
In June, it secured $78 million (about ₹633 crore) as part of its series H funding round at a valuation of about $4.9 billion from Google’s parent—Alphabet—and Temasek Holdings.
ShareChat, Moj, and TakaTak claim to have a combined active user base of nearly 500 million users, making Mohalla Tech the largest homegrown social media organization in India.
India has more than 350 million online video users, and the user base growing nearly twice as fast as markets such as China and Indonesia, according to an October 2021 report by Bain and Co.
