Instagram influencer Sharan Hegde has announced a 15% reduction in his company’s workforce as part of a cost-cutting initiative. Hegde, the founder and CEO of 1% Club, a financial education platform, stated that this is the first layoff exercise since the company’s beginning in 2022. The decision comes as the company shifts its focus towards implementing AI-driven cost savings. This announcement follows an anonymous Reddit post by an alleged employee claiming that around 40 employees were laid off. Hegde’s statement confirms the layoffs while highlighting the company’s financial stability and its commitment to utilising AI for greater efficiency. Hegde, who boasts over 2.7 million followers on Instagram, also emphasised that the company’s expansion, including its Mumbai office, was fully funded by profits. He also clarified that Rs 10 crore in investor funds remains untouched in a fixed deposit account.
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What Sharan Hegde said about layoffs
In a statement shared on professional networking platform LinkedIn, Hegde said: “I just laid off 15% of my workforce and I received a lot of messages from my friends and media if I’m going bankrupt. As a finance influencer who built his career around financial education, the irony isn’t lost on me 🙂 So let me give you guys an update- it’s been a while.
Business update: We are currently doing around $8Mn of annualised revenue with a 35-40% EBITDA. And yes, we have a fancy 5000 sqft office in Mumbai but all of this was done with the company’s profits. Our investor’s money of ₹10 Crores is currently invested in an FD earning 8.5% interest 🙂 We have almost 85,000 active paying customers and are working on new financial products and services some of which are already launched and have also achieved profitability.
So why did we lay off?
I started this company from my bedroom with just 5 interns 2 years back and fast forward to today we have almost 200 employees. Needless to say, when you grow at such lightning speed you are bound to make some mistakes with hiring and redundant expenses. This is our first cost-cutting exercise since inception. We have identified significant AI-driven cost savings that can boost profitability and efficiency which can be reinvested in the business growth. Raghav Gupta and I have been running this company bootstrapped without ever using investor capital because we are super strict with our financial planning and diligence.
While I don the hat of a capitalistic businessman continually growing the company I also realise the psychological impact on the laid-off employees. Please note that we have offered a healthy severance package depending on the tenure to all the laid-off employees and continue to support them with getting employed in my peer’s companies.”