Bengaluru based ShareChat has joined the layoff bandwagon, after the company announced on Wednesday that it will lay off 101 employees as a part of cost cutting measure. ShareChat’s Co-founder and CEO Ankush Sachdeva announced the layoff decision through a mail that was sent to all employees on early Wednesday morning.
Economic Times accessed the copy of the mail and was first to report about the news. Sachdeva cited pressure on company’s advertising revenues as the main reason for mass layoffs.
“We believe the advertising market will remain unpredictable this year. We’re streamlining our revenue teams to these new expectations,” Sachdeva said in the mail.
Sachdeva further added “ShareChat is built through relentless hardwork and sincerity that our people bring to work every day. This is a very tough call for us. I hope you underhand we had to do it for organization to sustain and see it through to other side of the pandemic.
Techpluto also reached out to ShareChat’s Communication Head, Rahul Nag, to know more about layoffs. Mr. Nag reverted back to us with an official statement. Here is a official statement that Mr. Nag shared with us one behalf of the company.
“The global pandemic along with various local market uncertainties have had an impact on our business plans. This has pushed us towards certain tough decisions including a revised leaner structure while we continue to grow. We’ve had to let go of 101 of our employees who’ve been part of our start-up journey. This was not an easy decision to make. The company will provide a comprehensive severance package and extend assistance to the impacted associates with their outplacement support.”
Techpluto also tried to enquire whether ShareChat is planning any more layoffs in the future and is there any plan for salary reduction to control the cost. However, Mr. Nag declined to comment on these sensitive issues.
With COVID-19 pandemic taking toll on all businesses, social media companies including Facebook are increasingly getting concerned about declining ad revenues. While declaring 2020 Q1 results Facebook said they had seen a “significant reduction in demand for advertising as well as a related decline in the pricing of our ads.”
With the decision to furlough 101 employees, ShareChat has joined a slew of high profile companies that have been forced to take similar decisions due to coronavirus crises.
The above chart displays the number of employees laid off by some of the high profile startups in recent months.
Almost all companies have directly or indirectly blamed COVID-19 crises for opting for mass layoffs. ShareChat, the latest company to join the layoff trend, is one of the few Indian startups to be backed by micro-blogging giant Twitter.