The layoff spree that started last year doesn’t seem to slow down anytime soon. Instead, with each passing day, it’s intensifying. The latest firms that are terminating their employees are startups ShareChat and Dunzo.
As consumer internet companies struggled with a funding slowdown and the ongoing economic downturn, they decided to cut jobs. While vernacular social media app ShareChat is laying off around 20% of its total workforce, Reliance-backed hyperlocal delivery platform Dunzo is bidding adieu to around 3% of its total workforce.
At least 450-500 employees will be impacted at ShareChat in the retrenchment drive that began in mid-December, reported Financial Express. Whereas, Dunzo’s spokeswoman declined to share the total number of employees affected by the layoffs.
However, another source of FE revealed that Dunzo employs close to 2,000 employees in the country, and around 100 employees were let go in December 2022.
At Dunzo, the layoffs came almost two months after the company was said to be in talks to raise close to $200 million from equity investors at a flat valuation growth over its previous funding round.
As per another report by Financial Express, the funding talks were in the advanced stage, with Abu Dhabi Investment Authority looking to lead the round.
“It’s unclear if the funding went through, and many employees working on the expansion plans were asked to leave in December 2022 since the company seems to have paused expansion,” the source told FE.
Kabeer Biswas, CEO and co-founder of Dunzo opened up about the terminations and said any decision that impacts people is tough, and the company’s last option.
“Last week, we had to part ways with 3% of our team strength. Whatever the numbers, these are people who chose to build their careers with Dunzo, and it is sad to have talented colleagues leave us. We are extending the best support possible to help them during this transition,” Biswas said.
A spokesperson for ShareChat said that even as the company plans to grow, several external macro factors have impacted the cost and availability of capital.
“As capital becomes expensive, companies need to prioritise their bets and invest in the highest-impact projects only. The decision to reduce employee costs was taken after much deliberation and in light of the growing market consensus that investment sentiments will remain very cautious throughout this year,” the ShareChat spokesperson said.
Other than ShareChat and Dunzo, some of the major companies that have kicked out their employees in 2023 are Vodafone, BlackRock, Coinbase, Amazon, Salesforce, Morgan Stanley, McDonald's, Goldman Sachs, and others.