ShareChat’s worth decreased by approximately $3.4 billion within a year, leading to the company letting go of more than 800 employees in 2023. The Indian startup and social media platform, ShareChat, faced challenges following a reduction of over 50% in its valuation this fiscal year. As a consequence, the Bengaluru-based company has implemented layoffs affecting 200 employees. On Wednesday, ShareChat allegedly terminated the employment of 200 individuals following the release of an official statement regarding the company’s “strategic restructuring” and efforts to “streamline the cost base.” This move comes in response to a significant decline in the overall valuation, as reported by the Economic Times.
On December 20, the company announced, “ShareChat today initiated a strategic restructuring as part of its annual planning for the year 2024. This decision underscores the company’s dedication to streamlining its cost base and achieving profitability within the next four to six quarters.” This recent round of workforce reductions follows ShareChat’s earlier decision to terminate 600 employees earlier this year as part of cost-cutting measures. However, the company has not disclosed any details regarding severance pay for the affected employees.
ShareChat’s valuation has experienced a significant decline, as reported by The Economic Times. The Bengaluru-based startup’s valuation plummeted from $4.9 billion last year to $1.5 billion this year, representing a reduction of nearly ₹28,300 crore. Reportedly, ShareChat, backed by Google and Tamasek, is in the final stages of securing $50 million in new funding to recuperate its diminished valuation, according to TechCrunch. The company has amassed a total of $1.4 billion in funding thus far.
In 2023, ShareChat underwent a workforce reduction of approximately 25%. Additionally, its parent company, Mohalla Tech, closed down the fantasy gaming entity Jeet11, resulting in the loss of jobs for 100 employees. The co-founders of ShareChat, Bhanu Pratap Singh and Farid Ahsan, resigned from the social media company in January 2023, causing a loss of confidence among investors as the company faced challenges in fundraising. While ShareChat reached its peak valuation of $5 billion in March, this figure steadily declined following layoffs and an increase in the net loss percentage.
