ShareChat to lay off 5% of its workforce; fourth round of job cuts in 2 years

sharechat to lay off 5% of workforce

Google- and Temasek-backed social media unicorn ShareChat is planning to fire about five percent of its workforce or about 20-30 employees from across verticals, after an annual performance review, Moneycontrol has learnt.

ShareChat currently has 530-550 employees and roughly five percent of them will be asked to leave the company as part of an annual exercise which ends later this month. A ShareChat spokesperson told Moneycontrol that the company plans to reduce headcount by around four percent. However, there are chances the number is higher as cost-cutting moves are still ongoing.

“We have just kickstarted our annual appraisal cycle. Every performance cycle, as a practice, roughly 3-4 percent of employees are rated at the bottom of the pyramid in terms of performance. And those people are asked to leave,” a company spokesperson told Moneycontrol.

After January, ShareChat's renewed headcount of 500 employees will be significantly lesser than its peak of around 2,800 a few years ago.

“In some cases, we can manage by redistributing the work, while in others we do replacement hiring. It has been part of our performance philosophy for the last four years now. People who are not pulling their weight, or are not justifying their ROI (return on investment) are asked to leave and we replace them,” the spokesperson added.

In the past two years, ShareChat has cumulatively laid off upwards of 850 employees across at least four rounds.

The social networking platform had fired about five percent of its workforce (around 30-40 employees) after its bi-annual performance review back in August 2024, when it had raised $16 million in convertible debt.

It had also fired another 200 employees in December 2023 in a cost-cutting exercise. Before that, ShareChat had laid off over 600 employees in January that year.

ShareChat, whose parent firm Mohalla Tech also operates short video platform Moj, usually undertakes two appraisal cycles during the year – one at the start of the year and the other mid-year.

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A string of Indian social media and short video apps such as Koo, Chingari, Mitron and others, which had jumped onto the scene following a ban on Chinese apps amid a border skirmish with the neighbouring country, have either shut down or found it difficult to scale up and monetise.

While global social media platforms like Facebook, Instagram and X (formerly Twitter) count India among their largest user-bases, the country lags behind in contributing a significant amount to their average revenue per user (ARPU).

ShareChat has, however, been undergoing a series of cost optimisation measures to improve profitability, and has reported an increase in overall revenue.

Mohalla Tech’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) losses fell by 67 percent to Rs 793 crore in FY24 from Rs 2,400 crore in FY23. The total loss before tax was at Rs 1,898 crore for the year, down 63 percent from Rs 5,143 crore loss in FY23. Its livestreaming business saw revenues surge 41 percent on-year to Rs 402 crore.

In a statement, the firm also claimed that ShareChat was fully profitable with over 15 percent EBITDA margin as of October 2024. Similarly, Moj achieved operational profitability, covering all costs except employee salaries, and is expected to be fully profitable by the end of FY25.

ShareChat, however, clarified that the current round of job cuts are not related to the company’s profitability drive.

“This (job cuts) has nothing to do with our profitability journey. It is linked to keeping a high-performing organisation,” said the spokesperson.

Last month, ShareChat roped in former Tik Tok executive Nitin Jain as its chief technology officer (CTO).  The firm also claims to have hired a new head of acquisition marketing, and is looking to increase the size of its acquisition marketing team by 50 percent, with three positions currently vacant.

“We have a bunch of new positions open. It can’t be that a company is hiring and firing at the same time…We are not in a position where we needed to cut people cost,” the spokesperson said.

Started in 2015 by Ankush Sachdeva, Bhanu Pratap Singh, and Farid Ahsan, Bengaluru-based ShareChat has raised around $1.3 billion across multiple funding rounds. Its investors include India Quotient, Tiger Global, Snap Inc, Twitter (now X), Elevation Capital, Moore Strategic Ventures, EDBI, and Mirae-Naver Asia Growth Fund.

However, Ahsan and Singh would later quit the company to start their own venture, for which the pair had raised $3 million in funding in 2023.