- Google-backed Indian tech startup ShareChat has said that it has trimmed around 20% of its workforce.
- This decision comes amidst increasing pressure from investors to minimize costs.
- Many startups in India and from across the world have cut down their task force to become profitable. ShareChat is not an exception.
Over the past six months, the tech sector’s reputation has hung in the balance as thousands of companies have laid off their staff for different reasons. The latest tech firm to join the list is ShareChat, a video-sharing platform backed by Google. ShareChat has laid off over 600 staff members to reduce costs due to increasing pressure from investors.
Many Indian startups have laid off a significant number of employees to become profitable over the past few months. Will this trend continue, or will we see a more guarded approach from startups?
YOU MAY ALSO LIKE: Why are tech companies laying off employees? Sector in trouble?
More about ShareChat layoffs
Although pressure from investors to reduce costs is cited as the main reason behind the layoffs, there are a few other factors one needs to consider. One, the global economic downturn has compelled startups to tread cautiously and spend strategically.
Ankush Sachdeva, Chief Executive Officer at ShareChat, says that there is an increasing belief in the market that the ongoing global economic downturn will overstay its welcome. As a result, businesses are responding by trimming their team size to minimize costs. ShareChat has done exactly that.
Additionally, ShareChat said that the company has taken considerable efforts to optimize expenses across the board, particularly in infrastructure and marketing, over the past six months. ShareChat, headquartered in Bengaluru and valued at $5 billion, has more than 2,200 staff members who are scattered across India, the United States, and Europe, according to the company’s website.
How will ShareChat compensate the affected employees?
ShareChat said that all the laid-off employees will receive their entire salary for their notice period. Besides, they will also get two weeks’ pay as ex gratia for each year they have worked at the company. In addition, laid-off employees will also receive their entire variable pay until December 2022. Further, their health insurance policy will also remain active until June 2023.
ShareChat will not interfere with the ESOPs of all the affected employees and allow them to vest as per the schedule. A company’s spokesperson said that the firm is stepping up efforts to increase live-streaming and advertising revenues. The idea is to navigate through the hostile economic conditions over a couple of years and come out stronger.
Continue reading iTMunch for the latest tech trends, news, and articles.
Feature Image Source: ShareChat