Mohalla Tech, the parent entity of vernacular social media platform ShareChat and short video entertainment app Moj is the latest to join the list of companies having layoffs this year. The company has fired 20% of its workforce because of external macro factors that impact the cost and availability of capital, according to the company’s spokesperson.
While the company didn’t divulge the number of employees who got affected by the layoff, sources outline that over 500 of the staff members were let go.
“…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,” said the spokesperson.
As part of the exit, the firm also provided financial packages such as two weeks’ pay as ex gratia for every year served with the company, retaining work assets such as laptops and health and insurance policy for the impacted employees.
This is the second round of layoffs at the Google and Twitter-backed firm which recently sacked over 100 employees after it shut down its fantasy sports platform Jeet11.
“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,” added the spokesperson.
Other companies that have laid off part of their workforce recently include Ola, Skit.ai, Cashfree, UpScalio, Bounce, Moglix, Harappa, Uniphore, LEAD, and Unacademy’s Relevel. An ET report suggested that Dunzo and Rebel Foods may also fire some employees soon.
More than 20,000 startup employees were fired in 2022, according to data compiled by Fintrackr. Amid the slowdown in funding, Indian startups saw mass layoffs, mostly during the second half of the year. Reports suggest that tech layoffs are set to worsen in the first half of 2023. Besides several big tech companies, this will also impact startups across stages.
ShareChat had emerged as one of the top-funded startups in FY22 as it mopped up three rounds including a $255 million round from Google, Times Group, and Temasek at a valuation of $5 billion.
While the company registered a 4.3X surge in its revenue from operations to Rs 347 crore in FY22, it didn’t manage to control expenses which surged 2.4X to Rs 3,407 crore. Its losses jumped 2.3X and stood at Rs 2,988 crore in the last fiscal year.
During FY22, ShareChat collected more than 60% of its revenue via advertisement services on the platform. According to the spokesperson, the company is doubling down on its efforts behind advertising and live-streaming revenues.