Sharan Hegde's 1% Club lays off 15% workforce amidst cost-cutting measures
In a LinkedIn post, Hegde explained that the layoffs were a result of “some mistakes with hiring and redundant expenses” during the company's growth phase. He also hinted at the potential impact of AI-led automation on certain roles within the organization.
ADVERTISEMENT
Finfluencer Sharan Hegde's financial edtech platform, The 1% Club, has recently announced layoffs affecting 15% of its workforce as part of a cost-cutting measure.
In a LinkedIn post, Hegde explained that the layoffs were a result of “some mistakes with hiring and redundant expenses” during the company's growth phase. He also hinted at the potential impact of AI-led automation on certain roles within the organization.
In his LinkedIn post, Hegde acknowledged the challenges of rapid growth, stating, "Needless to say, when you grow at such a lightning speed, you are bound to make some mistakes with hiring and redundant expenses." This round of layoffs marks the company's first cost-cutting measure since its inception.
Hegde also highlighted the potential of AI-driven cost savings to boost profitability and efficiency, allowing for reinvestment in business growth. The company offered a "healthy severance package" to affected employees, the amount varying based on tenure.
Raghav Gupta, co-founder of The 1% Club, commented on the post, emphasizing the need to adapt to the rapidly evolving business landscape, especially with the rapid advancement of AI. He expressed confidence in the future prospects of the laid-off employees, believing they will quickly find suitable opportunities in the market.
In a recent post, The 1% Club founder, Nikhil Hegde, sought to clarify concerns about potential financial distress and layoffs at the company. He emphasized that the company remains financially stable, citing its strong revenue and profitability.
Hegde revealed that the edtech platform is currently generating nearly $8 million in annualized revenue and boasts an EBITDA margin of 35-40%. To further solidify its financial position, the company has invested INR 10 crore raised in its Pre-Series A round into a fixed deposit.
These developments come amidst a broader funding winter in the Indian startup ecosystem. Many tech companies have been forced to implement cost-cutting measures, including layoffs, to navigate the challenging economic climate. However, The 1% Club, with its strong financial footing and growth trajectory, appears to be weathering the storm.
