ShareChat parent Mohalla Tech Pvt has laid off close to 600 employees, just six months after raising $255 million in funding, joining a growing list of heavily funded startups cutting costs in anticipation of the much-discussed funding winter worsening.
ShareChat laid off about 600 of its roughly 2,100 employees in senior management and mid-to-junior management in the last few days, according to people aware of the matter. However, the company has stated that it has laid off close to 500 employees, or about 20 percent of its workforce.
The company informed employees about the layoffs via email and also announced it on Slack to unaffected employees, stating that if they were reading the message, they were not affected by the action, the people said requesting anonymity. The sources also mentioned that access to terminated employees has been cut off.
The layoffs are a result of excessive hiring after a series of funding rounds, said one of the people quoted above.
As part of the layoff process, the affected employees will receive 100 percent of their variable pay until December 2022. Additionally, the company will pay the total salary for the notice period and two weeks' pay as ex gratia for every year served with the company.
ShareChat will also keep its health insurance policy in place until June 2023 and employees will be allowed to retain their work assets, such as their laptops. Moreover, employees can encash unused leave balances of up to 45 days as per the current gross salary. In addition, their stock options will continue to vest until April 30, 2023, and they will retain all vested employee stock option plans (ESOPs). The company confirmed the developments.
In December, ShareChat shut down its fantasy sports platform Jeet11 and laid off around 115 employees. Shortly after, the company's Chief Commercial Officer, Ajit Varghese, resigned after a couple of years with the company.
ShareChat, founded in 2015 by three IIT Kanpur alumni- Sachdeva, Farid Ahsan, and Bhanu Singh- was an early player in regional language content. It launched Moj in June 2020, following the TikTok ban, and has seen significant growth in the segment, alongside DailyHunt's Josh. ShareChat and Moj have a combined user base of approximately 340 million.
Mohalla Tech, the parent company of ShareChat, is currently valued at around $4.9 billion. In June 2022, it closed its Series H funding round, raising around $520 million from Google's parent company Alphabet and Singapore-based Temasek Holdings. In December 2021, ShareChat raised $226 million as part of the same funding round, and was valued at around $3.7 billion at that time.
ShareChat has joined other unicorns like LEAD, Unacademy, Moglix, and upGrad in laying off a significant number of employees in the first three weeks of the new year. According to data compiled by Moneycontrol, startups in India have already laid off around 1,000 employees in 2023 and around 20,000 employees since the start of 2022.
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