Social media unicorn ShareChat lays off 200 employees to reduce costs

This is the second such move this year for the Indian regional social network

Social media unicorn ShareChat has laid off 200 employees, around 15 per cent of its workforce, in another round of layoffs this year to reduce costs and achieve profitability within the next six quarters.

In January, Mohalla Tech Pvt Ltd, the parent company of platforms ShareChat and Moj, fired 500 employees, 20 per cent of its workforce. The same month, company co-founders Bhanu Pratap Singh and Farid Ahsan also stepped down from executive roles.

“ShareChat, today undertook a strategic restructuring as part of its annual planning for the year 2024. The decision reflects the company's commitment to streamlining its cost base and achieving profitability within the next 4-6 quarters,” said the company on December 20.

In alignment with its strategic vision, the company said, it undertook a comprehensive restructuring effort to streamline operations, enhance productivity, and position the firm for sustainable growth. As a result, the organisation has moved to a flatter organisation structure and prioritised product initiatives. These resulted in a reduction in team sizes by roughly 15 per cent.

“ShareChat remains committed to its core values and the well-being of its employees throughout this process,” said the company.

Last year, it achieved a valuation of $5 billion, when it closed a multi-tranche funding round to raise a total of $520 million. But the firm is now reportedly in the process of securing about $50 million in new funding that reduces the startup’s valuation to about $1.5 billion, according to the media reports.

The firm is now reportedly in the process of securing about $50 million in new funding that reduces the startup’s valuation to about $1.5 billion, according to the media reports.

ShareChat’s revenue from operations increased 59.4 per cent to Rs 533 crore in FY23 from Rs 347 crore in FY22, according to media platform Entrackr.  It recorded a nominal 8.4 per cent increase in its losses at Rs 3,241 crore in FY23 as compared to Rs 2,989 crore in FY22, according to Entrackr. The firm shut down its fantasy gaming platform Jeet11 in early December last year. It laid off 5 per cent of its workforce.