India’s startup ecosystem is several quarters into the funding winter, but well established names are still continuing to jettison staff in large numbers.
Sharechat has laid off 200 employees, ET reports. The laid off employees represent around 15 percent of its workforce. The employees who were let go were from different verticals, including product and other roles.
“In alignment with our strategic vision, the company undertook a comprehensive restructuring effort to streamline operations, enhance productivity, and position the company for sustainable growth,” a ShareChat spokesperson said about the layoffs. The company aims to streamline costs and achieve profitability in the last 4-6 quarters.
Techcrunch meanwhile reported that Sharechat is in the process of raising a new $50 million round at a valuation of $1.5 billion. This would be a steep 70 percent drop from its previous valuation of $4.9 billion. Existing backers including Temasek and Tencent are expected to participate in the round. Sharechat however said that reports on the $1.5 billion valuation were “grossly inaccurate.”
But Sharechat has had a forgettable year so far, which has seen the departure of two of its three co-founders, and the layoffs of hundreds of employees. In December 2022, Sharechat had laid off nearly 100 employees. In January this year, Sharechat laid off 500 more employees. The company has now laid off another 200 employees. Most tellingly, two of Sharechat’s co-founders, COO Farid Ahsan and CTO Bhanu Pratap Singh, had left their roles, and are now working on a new robotics startup.
It’s never a good sign when two of a company’s three co-founders leave and start a new company in an entirely different space, but Indian unicorns have been dealing with such stuff — and worse — over the last couple of years. Tens of thousands of employees have been laid off, and valuations have plummeted. Amidst all this, Sharechat’s financial results don’t make for pretty reading. The company is still losing massive sums of money, with little revenue to show for it — in FY22, Sharechat had losses of Rs. 2,500 crore, while it made only Rs. 347 crore in revenue. These numbers are clearly unsustainable in the new post-covid paradigm, and through yet another round of layoffs, Sharechat seems to be looking to help bring itself closer to being a sustainable entity in the long run.