Indian startup and social media platform ShareChat has been struggling after its valuation was cut by more than half this financial year. Now, the Bengaluru-based firm has laid off 200 employees.
ShareChat reportedly laid off 200 employees on Wednesday after issuing an official statement about “strategic restructuring” and “streamlining cost base” of the company, after the overall valuation took a major hit, said an Economic Times report.
The company said on December 20, “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 four-six quarters.”
This fresh wave of layoffs in the company comes after ShareChat decided to fire 600 employees earlier this year to cut costs. However, the company has not yet released any information about severance pay for the employees.
ShareChat valuation cut by $3.4 billion
The Economic Times reported that the valuation of Bengaluru-based startup ShareChat has been cut from $4.9 billion last year to $1.5 billion this year. This means that the valuation of the company has been cut by nearly ₹28,300 crore.
ShareChat, which is backed by Google and Tamasek, is in the final stages of securing $50 million in new funding to recover its lost valuation, as reported by TechCrunch. The company, till now, has raised a total of $1.4 billion.
In the year 2023, ShareChat laid off around 25 percent of its total workforce. Earlier, ShareChat’s parent company Mohalla Tech shut down its fantasy gaming company Jeet11, leading to 100 employees losing their jobs.
ShareChat co-founders Bhanu Pratap Singh and Farid Ahsan had resigned from the social media company in January 2023, leading to investors losing faith in the company as it struggles to raise funds.
ShareChat had touched its peak valuation in March at $5 billion, but the amount steadily declined after layoffs and increase in net loss percentage.