Google-backed ShareChat, Dunzo hand out pink slips to employees

Mohalla Tech Pvt Ltd, the parent company of homegrown video-sharing platforms ShareChat and Moj, has laid off 20 per cent of its workforce, comprising around 500 employees.

It cited “external macro factors that impacted the cost and availability of capital” for this step. This comes at a time when quick-commerce platform Dunzo had last week laid off 3 per cent of its workforce as part of a restructuring exercise. However, the announcement was made on Monday.

The firms, which are both backed by Google, have become the latest entrants in the long list of start-ups laying off employees. This comes amid the current funding crunch in the Indian start-up ecosystem.

ShareChat, which has the likes of Temasek among its backers, is currently valued at $5 billion and has a workforce of around 2,200.

“Since our launch eight years ago, ShareChat and our short video app Moj have seen incredible growth. Even as we continue to grow, there have been several external macro factors that impacted the cost and availability of capital,” said a ShareChat spokesperson.

He added, “Keeping these factors in mind, we need to prepare the company to sustain through these headwinds.”

This development comes a little over a month after the firm shut down its fantasy gaming platform Jeet11 in early December last year.

It laid off 5 per cent of its workforce. ShareChat had also raised $520 million in a multi-tranche funding round led by Google and Temasek in June 2022. The company claims that as capital becomes expensive, companies need to prioritise their bets and invest in the highest-impact projects only.

“The decision to reduce employee costs was taken after much deliberation. It was in light of the growing market consensus that investment sentiment will remain cautious throughout this year,” the spokesperson said.

ShareChat confirmed that it will be paying the total salary of the impacted employees for the notice period and their health insurance policy cover will remain in place till June 2023. And, employees will be allowed to retain their work assets, such as laptops.

In addition, employees will retain all their vested employee stock options (ESOPs). They will get two weeks’ pay as ex gratia for every year served with the company.

The firm said it is also doubling down on its efforts behind advertising and live-streaming revenues in a bid to get through the uncertain global economic conditions.