Sharechat Cuts 20 Percent of Employees Due to Investor Demands to Cut Costs
- Jan 16, 2023
ShareChat, an Indian short video-sharing platform backed by Google and Temasek, has laid off around 20% of its employees as the startup industry faces increasing pressure from investors to reduce costs. In 2020, ShareChat's parent company raised $300 million (roughly Rs. 2400 crore) in a fundraising round that valued the social media firm at nearly $5 billion (roughly Rs. 40,700 crores). This news highlights how digital adoption in India is being affected by increased competition and cost-cutting measures from investors.
The recent layoffs come amid a turbulent stock market environment that has pushed down tech shares across the globe. Last year, Indian startups raised $24 billion (roughly Rs 1,95,400 crore), which was one-third lower than in 2021 due to investor wariness of high valuations. To remain profitable and reduce costs even further, many startups have had to lay off thousands of employees in recent months.
Despite these layoffs at ShareChat, though, other Indian short video apps are still doing well due to their popularity post-TikTok ban imposed last year by the Government of India following a border clash with China. Apps like Moj and Josh have seen a massive surge in users since then – with Google investing heavily into both platforms – signaling just how important it is for companies to stay ahead of their competition when it comes to digital adoption in India’s increasingly crowded marketplace for mobile application services.
To keep up with changing trends and rising customer demands for new features or improved services on existing products or services, businesses will need to find ways not only to get ahead but also to remain competitive within this quickly evolving space. One such way could include regularly updating customers about new products or changes made through notifications on their mobile apps or websites. Additionally, companies should also ensure their team members have access to all necessary resources required for them to do effective work while remaining productive during any cost-cutting measure taken by investors during difficult times.
While layoffs are often seen as signs that businesses are struggling financially, they can also be used strategically as part of larger plans meant to help increase efficiency while allowing companies to save money over the long term. As Sharechat’s case shows us, startups must constantly innovate if they won't stay competitive amidst rising competition among digital players operating within India’s rapidly growing mobile application service marketplace.