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ShareChat reduces 15% workforce in fresh round of layoffs

Mumbai (News Trust of India) : Amidst the ebb and flow of corporate dynamics, ShareChat, a notable indigenous business and social media enclave, has performed a noteworthy reduction in its personnel, equal to a startling 15%. This organizational restructure unfolds almost precisely a year subsequent to the company’s earlier reduction initiative in January, where 20% of its staff, constituting 200 persons, experienced the brunt of cost-cutting measures. The calendar year 2023 concludes on a dismal note for domestic startups, as the fear of layoffs continues to cast its shadow.

In a fairly synchronic and worrisome turn of events, ShareChat’s parent organization, Mohalla Tech, found itself driven to shutter its fantasy gaming endeavor, Jeet11, in December of the previous year, blaming the relentless rivalry in the area. While the specific count of personnel affected by the latest employment reduction eludes Fortune India, preliminary sources hint that over 200 professionals faced the sad issuance of pink slips.

A statement from ShareChat elucidates that the strategic restructuring, a pivotal component of its annual planning for the forthcoming year of 2024, signifies the company’s unwavering commitment to rationalizing its cost infrastructure and charting a trajectory towards profitability within the ensuing 4-6 quarters. The corporate story further expounds on the complete restructuring program, aimed to streamline processes, amplify productivity, and strategically position the organization for sustained success. Consequently, the organization adopts a flatter hierarchical structure and channels its focus towards product initiatives, ending in a perceptible reduction in team sizes, approximately by a daunting 15%.

This Bengaluru-based firm, with the backing of industry titans Google and Temasek, finds itself involved in the complicated web of financial adjustments, with reports hinting to a depreciation in its valuation by a stunning ₹28,000 crore. ShareChat, a beacon in the area of domestic social media, suffers a dramatic decrease in valuation from $4.9 billion in the preceding year to a relatively humbled $1.5 billion in the present fiscal year.

Financial vicissitudes continue to mar Mohalla Tech’s trajectory, as the conglomerate, proprietors of the short-form video entertainment application Moj, discloses a consolidated net loss that surges beyond twofold, reaching ₹2,988 crore in FY22, a stark escalation from the ₹1,460 crore losses recorded in the previous fiscal year.

The broader canvas of the Indian startup landscape indicates a troubling trend, captured in a research by Tracxn, displaying a substantial 72% decline in financing throughout 2023. This significant cut, plummeting from $25 billion in the antecedent year, ushers in the lowest-funded year in the last quinquennium. India, formerly enjoying the coveted 4th position in global financing standings in 2022 and 2021, finds itself reduced to the 5th position in 2023, with a total funding inflow of a rather small $7 billion.

The final quarter of the year amplifies this financial decline, posting the lowest amount of funding at $957 million, establishing it as the least funded quarter since the third quarter of 2016. The major explanation underpinning this decline is the obvious plunge in late-stage finance, witnessing a shocking 73% contraction to $4.2 billion in 2023 from the erstwhile imposing amount of $15.6 billion in 2022, according per Tracxn’s analysis.

The statistical landscape further unravels with the discovery that the count of fundraising rounds exceeding the $100 million mark sits at a pitiful 17, showing a massive 69% reduction compared to the preceding year, according to Tracxn’s rigorous data investigation. The narrative of fiscal turmoil and strategic recalibration remains, molding the outlines of the current startup narrative.