ShareChat, owned by Bangalore-based Mohalla Tech Pvt Ltd., is expected to lay off around 20% of people. As investors, cautious of high valuations in an doubtful stock market, continue pushing tech companies to cut costs. The social media platform ShareChat today became the latest to decrease in expectation of an upcoming recession. The company, backed by tech giants like Google and Temasek, announced it would let go of 20 per cent of its staff as it needs to prepare the company to sustain “several external macro factors that impact the cost and availability of capital”.
Owned by Bangalore-based Mohalla Tech Pvt Ltd., ShareChat and its short video app Moj are expected to lay off around 500 people. The value of ShareChat is about $5 billion and has more than 2,200 employees. The company spokesperson said,”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. As capital becomes expensive, companies need to prioritise their bets and invest in the highest-impact projects only”.
This big decision comes in the backdrop of Mohalla Tech shutting down its online fantasy gaming platform Jeet11 in December 2022, following which nearly 100 employees were laid off. The company said it has aggressively optimised costs across the board over the last six months, and ramped up monetisation efforts.
“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,” the company spokesperson said. It said it’s doubling down on advertising and live-streaming revenues, and aims to sail through “uncertain economic conditions” over the next two years and come out stronger.
The company’s severance package will include the total salary for the notice period. Two weeks’ pay for every year operated at the company. It will also include full variable pay till December 2022. And also health insurance cover to remain active until June 2023.