ShareChat, a short video platform owned by Bengaluru-based Mohalla Tech, is planning to trim its workforce by 5% later this month following its annual performance review. This may translate to around 20-25 people losing their jobs.
Since January 2023, around 850 people have been laid off from ShareChat. Most of these layoffs are a part of its performance appraisal exercise. The company takes two appraisal cycles during the year. One is done at the start of the calendar year and another in the middle.
Manohar Singh Charan, CFO, ShareChat & Moj, said, “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. “
He added: “The company is not undertaking a cost-cutting exercise at this point. Our App ShareChat is already fully profitable for the last three months and we are on the threshold of becoming profitable at the overall level as well.”
Social media platforms like X and Instagram have found a large user base in India. But most of the short-form video platforms have been struggling to find their ground. In the last few years, several of these platforms like Chingari and Mitron have laid off their workforce. Chingari has laid off around 60-70% of its workforce leaving behind only 50-60 employees. Mitron had also in 2021 downsized its workforce by an unspecified number.
The difficulty has also increased after the adoption of artificial intelligence (AI). TikTok, the biggest such platform, laid off over 700 people in October last year after its adoption of content moderation by AI. The app was banned in India in 2020.
According to experts, the space created by the exit of TikTok is being more efficiently filled by short video features of bigger apps like YouTube (Shorts) and Instagram (Reels). At the peak of its popularity in India, TikTok had 200 million users. Currently, Reels has around 360 million and Shorts has around 400 million users.
ShareChat, which now employs around 500-550 people, is also working on improving its financials. It has recently hired TikTok executive Nitin Jain as its CFO.