The 1% Club laid off 15% of its workforce in its first cut since its founding in 2022, said its CEO and co-founder Sharan Hegde.
Finfluencer Sharan Hegde has cut 15 per cent of the staff of the 1% Club—which he co-founded with Raghav Gupta—as part of a “cost-cutting exercise” that will pave the way for the company’s long-term growth. According to Hegde, the chief executive, such a move was necessitated by “redundant expenses” and “mistakes in hiring.”
The 1% Club, which received investment from Zerodha co-founder Nikhil Kamath, works on making people “financially free.”
I just laid off 15% of my workforce, and I received many messages from my friends and media about whether I was going bankrupt. As a finance influencer who built his career around financial education, the irony isn’t lost on me,” Hedge wrote on LinkedIn.
Further, he explained why it had to lay them off and even gave an update on the business side of his company. The long LinkedIn post comes in the wake of an ex-worker calling out the company for not managing finances well.
The former employee, who wished to remain anonymous, went online and vented his frustrations, recalling the happiness of joining a team that preaches “financial literacy” and “responsibility. ” The Day before yesterday, they blindsided me with a layoff email. Turns out, around 40 of us are getting cut, including people who moved cities for this job,” the user wrote to Reddit.
The user even claimed that the firm hired more than 150 people and opened a high-end office in one of the “priciest parts of Mumbai (Jogeshwari)” with just Rs 10 crore funding. While Hegde, one of the founders of the venture, acknowledged he had a “fancy office” in Mumbai, he clarified it was because of the profit the company earned from the business and not from the investment money. “We have a fancy 5000 sqft office in Mumbai, but all this was done with the company’s profits. Our investor’s money of Rs 10 crore is currently invested in an FD earning 8.5% interest,” he revealed.
Despite the layoffs, Hegde gave an upbeat update on the company’s performance, adding that 1% Club is currently at $8 million of annualised revenue with a 35-40% EBITDA margin. “We have almost 85,000 active paying customers and are working on new financial products and services, some of which have already launched and have also achieved profitability,” he asserted.
