Mohalla Tech, which raised $255 million in funding in June 2022, joins the growing list of startups that have laid off employees to cut costs amid the funding winter.
“We are taking a very difficult decision today to part ways with around 20% of our talented FTEs to ensure the financial health and longevity of our company in the current uncertain macroeconomic environment,” CEO Ankush Sachdeva told employees in an email.
“ShareChat and Moj have been built with the relentless hard work of all of you and it is heart-wrenching to have some of us leaving our company today,” he added
Sachdeva said the company overestimated the market’s growth during the highs of 2021 and underestimated the duration and intensity of the global liquidity squeeze that followed.
He said the company would share more details with the laid off employees on their personal email IDs, adding that they would no longer have access to the company’s Slack channels and email “the security of sensitive company information as well as the personal data of our customers”.
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“I realise that this sudden revoking of access is not the ideal experience. We debated a lot about it but this was the only practical solution,” he added.Also read | Exclusive: More consumer internet startups like ShareChat, Dunzo, Rebel Foods join layoff wave
In his email, the Sharechat CEO said the company was one of the first startups in India to take proactive measures amid the downturn by sharply reducing costs across user acquisition, marketing and server spends, “while raising an additional round of funding, anticipating a challenging business environment”.
“We also put in a guardrail of a flat headcount in May, and with your support executed our AOP with much less than planned bandwidth,” he added.
“However, this was clearly not enough. 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,” he said.
Sachdeva said the company converged on its 2023 AOP list of projects and bets over the last several weeks.
“In the process, we ensured that each bet carried a clear revenue, cost or retention/time spent impact. We then put a high bar on all the bets to ensure we arrive at a smaller list of high-ROI projects. The smaller list meant we had to shut down some of our running workstreams while investing more in others. This led to several existing roles becoming redundant,” he said.
As part of their severance package, affected employees will receive 100% of their variable pay until December 2022. It will also include notice-period salary plus 15 days of monthly gross salary for each year served as a full-time employee.
The company will also keep its health insurance policy in place until June 2023.
The laid off employees will also be allowed to retain their work assets, such as laptops and mobile phones, for personal use. They will also be able to encash unused leave balances of up to 45 days as per their current gross salary. In addition, they will retain all stock options that vest on or before April 30, 2023.
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