In a second round of layoffs this year, Google-backed ShareChat has fired about 15% of its workforce as the vernacular social media platform looks to cut costs to turn profitable in the next year-and-a-half. The layoff likely affected around 200 employees across verticals. The platform has a total headcount of over 1,300.
“ShareChat today undertook a strategic restructuring as part of its annual planning for 2024. The decision reflects the commitment to streamline cost base and achieve profitability in the next 4-6 quarters. As a result, it has moved to a flatter organisation structure and prioritised product initiatives that resulted in a reduction in team size by roughly 15%,” ShareChat said in a statement.
The funding winter has compelled many startups to focus on sustainable growth and profitability to justify their high valuations, leading to headcount reduction as a cost-saving measure. Some of these startups had raised capital at a high valuation during the funding boom of 2021 and also hired at a large scale, encouraged by growth prospects.ShareChat’s parent had raised more than $1.1 billion during the funding boom of 2021, as per Tracxn data. Last year, it had raised $300 million in fresh funding from Times Group, Google and Temasek Holdings at a $5-billion valuation.
However, recent media reports suggest that the company might see a substantial cut in its valuation as it is looking to raise another $50 million from its existing investors. Meanwhile, concerns remain as ShareChat posted a 38% jump in losses to Rs 4,000 crore in FY23. Its revenue grew 62% y-o-y to Rs 540 crore.