ShareChat lays off 20% employees, sending shockwaves
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New Delhi: Social media platform ShareChat today joined other tech giants in cutting costs, announcing to lay off 20 percent of workers.
The move comes in the anticipation of a recession as investors are reportedly pushing companies to downsize.
"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," a company spokesperson reportedly said.
An announcement from the company linked the decision to "several external macro factors that impact the cost and availability of capital".
The company, backed by tech giants like Google and Temasek, is owned by Bangalore based Mohalla Tech Pvt Ltd.
ShareChat and its short video app Moj is likely to lay-off around 500 people. ShareChat, valued at $5 billion, has more than 2,200 employees.
Only a month ago, Mohalla Tech shut down its online fantasy gaming platform Jeet11 laying off 100 employees, which forms a backdrop to ShareChat’s cost cutting.
ShareChat app contributed largely to the revenue of Mohalla Tech through advertisements, which increased 30% year-on-year in FY22, according to NDTV.
However, Mohalla Tech's total expenses soared almost 119% to ₹ 3,407.5 crore from ₹ 1,557.5 crore in financial year 2021.
Signalling a major crisis in job market in the New Year, social media giants have long been laying off employees with Twitter showing door to close to 50 percent of workers.
Fresh layoffs add to the stress employees are feeling in the job market with opportunities getting dried up.