Indian social media startup ShareChat said on Monday that it laid off around 20% of its staff.
What Happened: The short video-sharing platform backed by Alphabet Inc‘s GOOGL GOOG Google said it was facing increasing pressure from investors to reduce costs.
“There is a growing market consensus that the current global economic downturn would be a much more sustained one, and we thus have to, unfortunately, seek more cost savings by reducing our team size,” ShareChat Chief Executive Officer Ankush Sachdeva said in an internal memo, according to Reuters.
ShareChat also said that over the past six months, it had “aggressively optimized costs” across its business, including marketing and infrastructure.
A company spokesperson told the publication that the move was aimed “to sail through the uncertain global economic conditions over 2023 and 2024.”
“As capital becomes expensive, companies need to prioritize their bets and invest in the highest-impact projects only,” the spokesperson added.
The Indian startup had more than 2,200 employees and is valued at $5 billion. The laid-off employees will get two weeks’ pay for every year served and employee stock ownership plans will continue to vest as per schedule until Apr. 30, the report noted.
ShareChat had earlier in 2021 raised $502 million in a funding round that saw participation from Snapchat parent Snap Inc. SNAP and Twitter Inc. And, in 2022, it announced to have raised $255 million in funds from Google, Times Group, and Temasek.