Twitter backed ShareChat trims 101 jobs as Covid-19 hits ad revenues

Twitter backed ShareChat trims 101 jobs as Covid-19 hits ad revenues
Photo Credit: VCCircle
20 May, 2020

ShareChat said on Wednesday it laid off 101 employees, as the vernacular social media platform joins firms that are cutting costs in a Covid-19 hit business climate.

The Bengaluru-based startup will provide a ‘comprehensive’ severance package and extend assistance to the impacted associates with their outplacement support, a spokesperson told TechCircle.

While the spokesperson declined TechCircle’s request for comment on the total number of employees, other media reports pegged the layoff to impact a quarter of its workforce.

Earlier in the day, co-founder and CEO Ankush Sachdeva, in an email to employees and blogpost, disclosed the startup’s Covid-19 induced financial crunch and associated cost-cutting measures.

“We believe the Ad Market will remain unpredictable this year. We are streamlining our revenue teams to these new expectations yet will keep working towards building the necessary technology infrastructure,” Sachdeva said.

He added that the company has ‘aggressively’ reduced its server costs, and has to focus on its core product and feed recommendation-driven growth levers while scaling back on other products.

Read: Coronavirus India Updates

Last month, ShareChat’s parent company Mohalla Tech, said it acquired Kae Capital-backed meme sharing platform Memer to integrate the new product suite into its content offerings.

Memer is ShareChat’s second acquisition in 2020 -- it bought social commerce platform Elanic in February. The company was open to more content-driven acquisitions in the future and was reportedly also scouting for deals in artificial intelligence, machine learning and online gaming sectors.

ShareChat has 60 million users across 15 Indian languages. The five-year-old startup last raised $100 million in a growth round in August from micro-blogging platform Twitter, and others.

The deal marked Twitter’s first India based investment.

Mohalla Tech widened its losses 12-fold to Rs 414.7 crore in the financial year 2018-19.