ShareChat to trim workforce as performance reviews trigger layoffs

Social media platform ShareChat is set to lay off around 5% of its workforce following its annual performance review, according to a report by MoneyControl. ShareChat is owned by Bengaluru-based Mohalla Tech and backed by Google and Temasek. This downsizing reportedly equates to approximately 20-30 employees across various departments.

A company spokesperson clarified that the job cuts are not part of a cost-cutting exercise but are a result of ShareChat's performance-based policy. This policy is consistent with the company's biannual performance appraisal process, which assesses employee contributions at the start and mid-point of each calendar year.

Manohar Singh Charan, Chief Financial Officer, ShareChat & Moj, stated, "The company is not undertaking any layoffs. We are in the middle of our annual appraisal cycle and as a part of our bar raising process, we replace bottom performers every cycle. Less than 5% of our headcount is impacted by this. Most of these positions will be subsequently filled with replacements. The company is not undertaking a cost-cutting exercise at this point." Over the past two years, ShareChat has reduced its workforce significantly, with over 850 employees laid off during four rounds of restructuring.

Despite these layoffs, ShareChat has made significant strides in improving its financial performance, according to the report. The company reported a 67% reduction in adjusted EBITDA losses, from ₹2,400 crore in FY23 to ₹793 crore in FY24. Additionally, its livestreaming revenue grew by 41% year-on-year to ₹402 crore during the same period.

The platform’s short video app, Moj, has also achieved profitability, with ShareChat reporting an EBITDA margin of over 15% in October 2024. This underscores the company's ongoing efforts to optimise operations while maintaining financial growth.  

In a surprising juxtaposition, ShareChat is actively hiring for key roles even while trimming its workforce. The company has bolstered its leadership by appointing Nitin Jain, a former TikTok executive, as its Chief Technology Officer. It also plans to expand its acquisition marketing team by 50%, reflecting its commitment to driving growth in strategic areas.  

Short-form video platforms have faced significant challenges in India since the ban of TikTok in 2020. While TikTok’s absence initially created opportunities, the market is now dominated by features from larger platforms such as YouTube Shorts and Instagram Reels, which boast user bases of 400 million and 360 million respectively. Smaller platforms have struggled to compete, facing significant downsizing in recent years.  

ShareChat’s recent measures indicate a focus on maintaining a high-performing team while navigating the competitive and evolving short-form video landscape in India.