One of the popular Indian social media platform ShareChat has announced its intentions to cut around 5% of its staff as part of its annual performance review cycle. According to sources, the current estimates is that this will amount to 20 to 30 employees working in the company, which currently employs around 530 to 550 people.
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Reasons Behind the Layoffs
ShareChat said it was letting some of its employees go. It is done to ensure that it had the best-performing workforce. According to the company, it annually reviews the performance of its employees to match the changing business goals. From reports, a spokesperson said that every performance cycle, around 3-4% of employees are rated at the bottom of the pyramid in terms of performance, and those employees are asked to leave
This plan is similar to that of other tech organizations as well. For example, recently Meta and Google has followed the concept of performance-based layoffs. ShareChat follows this restructuring model as part of its long-term plan to build excellence and adaptability in a competitive scenario.
Recent Performance and Financial Health
ShareChat reported better financial performance for the fiscal year 2024 despite layoffs. The company recorded a revenue of ₹718 crore, up 33% from ₹540 crore in the previous fiscal year. Advertising revenue also increased by 23% year-on-year to ₹315 crore, with diversification into mid-market and FMCG sectors.
The company has also shown significant improvement in reducing its operating losses, which have come down to ₹793 crore, or 67% of ₹2,400 crore in FY23. ShareChat’s total loss for FY24 was ₹1,898 crore, down by 63.1% from ₹5,142 crore in FY23.
Background of Layoffs
ShareChat has not laid off employees for the first time. During the last two years, more than 850 employees have left the company from different rounds of job cuts. ShareChat decreased its workforce in August 2024 by almost 5%, dismissing about 30-40 employees from its rolls in a performance review exercise held semi-annually. The company had earlier in December 2023 laid off 200 employees as part of another cost-cutting measure, and in January 2023, it saw over 600 employees exit in a single round of layoffs.
In conclusion, as ShareChat battles the problem of the increasingly competitive social media. The reason for its cutting-edge decision based on performance review stands as the next wave within the tech space. The difficult situation that people who are now facing lay-offs have to go through cannot negate the importance that the firm seems to accord toward financial and operational efficiency and the overall wellness.
