Indian social media startup Sharecut has deactivated the accounts of over 400 of its employees, which is about 20% of its workforce, as it seeks to navigate the global economic downturn.
The startup which has already informed affected employees about the deactivation of accounts, through its CEO Ankush Sachdeva, disclosed that such a drastic decision was taken to ensure the financial health and longevity of the startup.
In his words, “We are taking a very different decision today to part ways with around 20% of our talented full-time employees to ensure the financial health and longevity of our company in the current uncertain macroeconomic environment.
“In hindsight, we overestimated the market growth in the highs of 2021 and underestimated the duration and intensity of the global liquidity squeeze”.
Speaking on the deactivation of laid-off employees’ accounts, the CEO disclosed that revoking employees’ access was not an ideal experience, although, after much deliberation, he disclosed that that was the only practical solution.
For the affected employees, they will receive the total salary for their notice period and two weeks’ pay as ex gratia for every year they served the startup. The employees will also get 100% of the variable pay until December 2023, and their health insurance policy coverage will remain until the end of June.
Also, for employees who have to leave the startup as part of the job cuts, their Esops that vest on April 30, 2023, will be retained by those staffers.
Investors King understands that a month ago, sharecut laid off 5% of its employees after it shut down its fantasy sports platform Jeet 11 after disclosing that the platform never gained any meaningful traction among its users.
Sharecut since its operation had raised a total of $1.7 billion in funding over 15 rounds and is reportedly funded by 26 investors with tech giant Google as one of the lead investors.
The start-up has a total workforce of around 2,300 employees, but the recent layoffs at the company will no doubt result in a decline in the number of employees.
