Bengaluru-based ShareChat, the Indian social media start-up has laid off 20 per cent of its workforce or over 400 employees.
The start-up informed its employees about the decision in an internal note on Monday. The company deactivated Slack and email access for its impacted staff while the employees still at the firm were informed of the development through its internal Slack channel, ET reported.
The start-up has an employee count of over 2700 employees.
“We are taking a very difficult decision today to part ways with around 20 per cent of our talented FTEs (full-time employees) to ensure the financial health and longevity of our company in the current uncertain macroeconomic environment,” said Ankush Sachdeva, chief executive officer (CEO) of ShareChat in an internal note.
The executive also noted that the startup “overestimated the market growth in the highs of 2021 and underestimated the duration and intensity of the global liquidity squeeze.”
“Since our launch eight years ago, ShareChat and our short video app Moj have seen incredible growth. However, even as we continue to keep growing, there have been several external macro factors that impact the cost and availability of capital,” said the spokesperson in a media report.
“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 per cent of our incredibly talented employees who have been with us in this start-up journey," they added.
The affected employees will receive the total salary for their notice period and two weeks' pay as ex gratia for every year they served the start-up. The employees will also get 100 per cent of the variable pay until December 2022 and their health insurance policy cover will remain until the end of June.
The start-up will also allow employee stock ownership plans (ESOPs) of its affected employees to continue to vest per their schedule up until April 30.
Founded in 2015, ShareChat has reportedly raised over $1 billion in over 15 funding rounds, including its last fundraising of $300 million in a Series H round in May last year.
The start-up is backed by MohallaTech which is its parent company along with Twitter, Google, Tiger Global and Temasek.