In the face of macroeconomic uncertainty and a significant possibility of a global economic recession, Indian startup Chingari has decided to terminate 20 percent of its workforce. The company’s spokesperson informed news agencies that these recent layoffs were a crucial component of the organization’s restructuring efforts.
Chingari’s spokesperson expressed sincere regret over the necessity of implementing a 20% reduction in the workforce as part of the company’s organizational restructuring. The spokesperson acknowledged that these decisions were among the most challenging for the management team and recognized the significant impact they would have on the affected employees.
Chingari also conveyed gratitude for the contributions and dedication of its employees throughout their time with the company.
Chingari, a social media entertainment app focused on video sharing, was originally founded by Sumit Ghosh, Biswatma Nayak, Deepak Salvi, and Aditya Kothari in 2018. In 2020, the app underwent a rebranding and redesign.
This transformation coincided with the ban of TikTok in India, which occurred due to concerns regarding security and data privacy. As a result, apps like Chingari found themselves thrust into the spotlight as popular alternatives to TikTok.
Severance Pay and Career Assistance
According to the spokesperson, Chingari has decided to provide severance pay to the employees affected by the lay-offs. The impacted employees will reportedly receive severance packages equivalent to two months’ salary as a gesture of acknowledging their contributions and commitment.
Additionally, to prioritize the well-being of the affected employees during this challenging period, Chingari will extend their health insurance coverage for an additional three months.
Chingari has taken further steps to support the affected employees by offering comprehensive assistance, including career counselling and job placement support. The company’s commitment to providing such resources reflects its dedication to supporting the impacted employees during their transition.
The statement emphasized Chingari’s focus on optimizing processes, enhancing productivity, and aligning resources with its long-term growth objectives.
Chingari’s recent lay-offs follow the resignation of co-founder Aditya Kothari from the company in May 2023. Recent development highlights that Chingari is not the only Indian startup opting to downsize its workforce as a strategic response to challenging economic circumstances.
Not only Chingari
Mohalla Tech Private Limited, the parent company of ShareChat and Moj, recently implemented a workforce reduction, resulting in the termination of approximately 500 employees, which accounts for roughly 20 percent of their staff.
CEO Ankush Sachdeva stated that the company had miscalculated the market growth projections for 2021 and had underestimated the severity and duration of the global liquidity squeeze. This led to the difficult decision to downsize the workforce in order to align with the current market conditions.
Earlier, major entertainment powerhouses, Walt Disney Co and Warner Bros Discovery, had initiated layoffs primarily in response to financial losses, an economic crisis, and a decline in revenue. These factors compelled both companies to make the difficult decision of reducing their workforce in order to navigate the challenging financial landscape.
