ShareChat Layoffs: Homegrown social media platform ShareChat and short-video platform Moj’s parent Mohalla Tech has fired 20% of its employees in a fresh round of job cuts, as per an internal note by company CEO Ankush Sachdeva.
According to a report by Economic Times, the fresh layoffs amount to about 500 jobs being cut at the Bengaluru-based firm. In December last year, the company had reduced at least 100 jobs.
In a note to the employees, Sachdeva said, “We are taking a very difficult decision today to part ways with around 20% of our talented FTEs (full-time employees) to ensure the financial health and longevity of our company in the current uncertain macroeconomic environment.”
Read More: TCS Shares Trade Ex-Dividend; Record Date, Other Key Things Investors Need to Know
“In hindsight, we overestimated the market growth in the highs of 2021 and underestimated the duration and intensity of the global liquidity squeeze,” Sachdeva, who started the firm with Farid Ahsan and Bhanu Pratap Singh in 2015, said while explaining the rationale behind the fresh round of layoffs.
The company further said that it has deactivated Slack and email access for its impacted employees while the fired staff who are still at the firm were informed of the development through its internal Slack channel.
“I realize that this sudden revoking of access is not the ideal experience. We debated a lot about it but this was the only practical solution. We trust that all of you have ShareChat’s best interest in mind but this step had to be taken to ensure the security of sensitive company information as well as the personal data of our customers,” ShareChat’s CEO Sachdeva further stated.
ShareChat’s explanation
Further, Sachdeva said he had shared (in recent town halls) about the changing market dynamics and its impact on MohallaTech.
“We were one of the first startups in India to take proactive measures by sharply reducing our costs across user-acquisition, marketing and server spends, while raising an additional round of funding, anticipating a challenging business environment,” the CEO said on some of the steps taken by the firm to rein in costs, as quoted by ET.
“We also put in a guardrail of flat headcount in May, and with your support executed on our AOP with much lesser than planned bandwidth,” he added.
Read More: Explained: Can anyone close your SCSS account without permission?
According to Sachdeva, this was ‘clearly not enough’.
He said that there is a growing market consensus that the current global economic downturn would be a much more sustained one. “…we thus have to, unfortunately, seek more cost savings by reducing our team size,” ShareChat’s CEO added in his note to staff on Monday morning.
Financial package for affected employees
The company also announced a financial package for the affected employees at ShareChat’s parent firm. The compensation includes a payout for the notice period and an additional 15 days of monthly gross salary for each completed year of service as a full-time employee.
A performance bonus will be paid 100% pro-rated till December 31, 2022, along with any amounts that have accrued but remain unpaid as of the last working day, as per the note of the CEO.
Besides, health insurance benefits will continue to remain active till June 30, 2023, and laptops and smartphones provided to the staff by the company during the tenure of the employment can be retained by the employee for their personal use.
For employees who have to leave the firm as part of the job cuts, their Esops that vest on or before April 30, 2023, will be retained by those staffers, the note added.
The HR team is expected to reach out to employees on their personal mail IDs with further details in the next few hours, ET reported.
“I am saddened and apologetic that we could not take adequate measures in time to ensure the continuity of all our people in this journey,” Sachdeva said in his concluding words in the note to the affected staff.
