ShareChat, the social media platform backed by Google and Temasek, is once again in the spotlight as it plans to lay off approximately 20-30 employees, which accounts for roughly 5% of its workforce. This decision follows the company’s annual performance review process and marks the fourth round of layoffs in just two years. ShareChat's ongoing adjustments are part of a broader strategy to optimize operational efficiency while striving for long-term profitability in a competitive market.
In recent years, ShareChat’s workforce has seen a significant decline. Once standing at a peak of 2,800 employees, the company’s headcount has now been reduced to a range of 530-550. The reduction in staff raises concerns about the company's ability to scale and sustain its growth trajectory in a rapidly changing digital landscape. However, a company spokesperson has clarified that these job cuts are not a reflection of the company’s financial instability. Instead, they are intended to refine and streamline the team by removing underperforming members, thereby ensuring that only the most capable individuals remain to support the company's long-term vision.
A Shift Toward Operational Efficiency
ShareChat’s parent company, Mohalla Tech, which also runs the short video app Moj, conducts two performance reviews each year to assess the effectiveness of its workforce. The company has been working diligently to reduce its financial losses, which have been quite substantial in previous years. In FY24, ShareChat was able to achieve a remarkable 67% reduction in adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) losses, dropping from Rs 2,400 crore in FY23 to Rs 793 crore. This turnaround in financial performance is being touted as a major achievement for the company, and it signals that ShareChat’s management is making the right moves to improve operational efficiency despite facing multiple challenges.
The company’s livestreaming business has also contributed significantly to its positive trajectory, with revenue growth of 41% year-on-year. The livestreaming segment alone generated Rs 402 crore in FY24, showcasing the company’s ability to expand and scale its offerings in areas that are clearly in demand.
While ShareChat is working hard to cut down on its operational costs, it is also strategically focusing on key areas of growth. Despite the ongoing layoffs, the company continues to expand in critical functions, such as marketing and technology. One of the latest developments is the appointment of Nitin Jain, a former executive at TikTok, as the new Chief Technology Officer (CTO). This move is intended to strengthen ShareChat’s technology leadership as the company navigates its evolution in the social media and short-video space. Moreover, ShareChat is increasing its focus on its acquisition marketing team, with plans to expand this group by an additional 50%, further demonstrating the company's drive to improve its market presence and competitiveness.
Maintaining Profitability Amid Operational Challenges
While layoffs can often signal financial troubles for a company, ShareChat has made it clear that the decision is not driven by the need to reduce costs due to a lack of funds. Rather, it is part of the company’s commitment to ensuring that its workforce is composed of only the most high-performing, results-driven employees. ShareChat’s leaders are intent on positioning the company for sustainable growth by prioritizing operational effectiveness. The company remains focused on maintaining profitability, even as it navigates the challenges inherent in a fast-evolving tech landscape.
Additionally, ShareChat’s focus on strategic hiring amidst workforce reductions highlights its adaptability and long-term vision. The company is not just trimming down its workforce but is instead focusing on retaining talent that can help propel its business forward in a rapidly changing environment. By ensuring that it has the right people in key roles, ShareChat aims to continue to expand its footprint in India’s highly competitive social media and digital content space.
Despite the controversy and concerns surrounding the layoffs, ShareChat is continuing to make bold moves to ensure that it remains at the forefront of the social media landscape. The recent financial improvements, combined with the company’s continued investments in growth areas such as live streaming, technology, and marketing, demonstrate its commitment to thriving in the long term, even if it means making tough decisions in the short term.
Looking to the Future
The company’s ability to navigate such turbulent times reflects a broader strategy of improving business fundamentals while maintaining focus on market opportunities. For ShareChat, the combination of cost reductions, strategic hiring, and improved financial metrics suggests that it is not merely surviving but actively positioning itself for success. With the continued expansion of short-video platforms, live streaming services, and digital content consumption, ShareChat is placing itself in a favorable position for future growth, provided it can maintain operational discipline and continue delivering value to its users and advertisers alike.
In conclusion, while the layoffs at ShareChat reflect ongoing adjustments to its workforce, the company’s broader efforts to improve profitability and expand into key areas of its business suggest that it is planning for long-term success. ShareChat’s future will depend on its ability to adapt to the evolving market, and by focusing on its core strengths, it aims to continue on the path to becoming a dominant player in the Indian social media and digital content ecosystem.
