Homegrown social media platform ShareChat and short-video platform Moj's parent company is Mohalla Tech Private Limited, has fired 500 employees, or about 20 per cent of their staff. The details of which departments will be impacted are not yet clear.
A Sharechat spokesperson in a statement confirmed the layoff, saying, “We’ve had to take some of the most difficult and painful decisions in our history as a company and have to let go of around 20% of our incredibly talented employees who have been with us on this startup journey.”
The spokesperson also added, “The decision to reduce employee costs was taken after much deliberation and in light of the growing market consensus that investment sentiments will remain very cautious throughout this year.”
The CEO Ankush Sachdeva in a note to the employees said that the company had overestimated the market growth in the highs of 2021 and at the same time the company also underestimated the intensity and the duration of global liquidity squeeze.
While the company's Series G round of funding raised $266 million at a valuation of $3.7 billion last month, the CEO said that the company is taking proactive measures by reducing costs across user-acquisition, server spending and marketing.
Compensation to affected employees
Mohalla Tech Private has announced a financial package for those who will be affected by the layoff. The compensation will include a payout for the notice period with an addition of 15 days of monthly gross salary for each completed year of service as a full-time employee. The company will also pay 100 per cent performance bonus prorated until December 31, 2022, along with any amount that has been accrued but not paid as of the last working day, reported the Economic Times.
The health insurance provided by the company will remain active until June 30, 2023, and in addition, any devices like laptops and smartphones given by the company will be retained by the staff for their personal use. The employees with Esops vested on or before April 30, 2023 will also be retained.
Previous layoffs by Mohalla Tech Private Limited
This comes after the Bengaluru-based firm shut down its fantasy gaming platform Jeet11 last month, which resulted in 100 employees being laid off.
In the latest round of layoffs at the company, a total of 600 employees were fired.
