Sharan Hegde lays off 15% of employees from 1% Club; Here's what he said

Finance influencer Sharan Hegde's 1% Club has laid off 15% of its workforce as part of efforts to boost profitability and cut redundant expenses.

"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 :)," Hegde wrote in a LinkedIn post.

While Hegde did not disclose the exact number of affected employees, a Reddit user claimed that around 40 employees were laid off.

Sharan Hedge shares 1% Club's financial performance

According to Hegde's LinkedIn post, 1% Club is generating approximately $8 million in annualized revenue, with a robust EBITDA margin of 35-40%. Highlighting its financial health, Hegde mentioned that the business has been self-sustaining without the need for external investor funds in its operations.

He said that the investor's money of Rs 10 crore is invested in a fixed deposit (FD) earning an interest of 8.5%.

In October last year, 1% Club raised Rs 10 crore in funding from billionaire Zerodha co-founder Nikhil Kamath's Gruhas and Abhijeet Pai from the Puzzolana Group.

Hegde also claimed that 1% Club serves nearly 85,000 active paying customers and has also been developing new financial products and services, which have already achieved profitability.

The reason behind the layoffs

Hegde explained that the layoffs are part of the startup's first major cost-cutting exercise since its inception. He revealed that 1% Club, which began just two years ago with only five interns and now employs nearly 200 people, saw rapid growth that led to some inefficiencies in hiring and operational expenses.

"I started this company from my bedroom with just 5 interns 2 years back and fast forward today we have almost 200 employees. Needless to say, when you grow at such lightening speed you are bound to make some mistakes with hiring and redundant expenses," he noted.

“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,” Hegde added.

Support for affected employees

Hegde acknowledged the difficult nature of the decision and the psychological impact on the affected employees.

He noted that the 1% Club has offered a healthy severance package based on tenure to all laid-off employees and will continue to support them in finding new job opportunities.

Sharan Hegde is one of India's top financial influencer who has over 3 million+ followers across various social media platforms, including Instagram where has has more than 2.7 million followers.

Co-founded by Sharan Hegde and Raghav Gupta, 1% Club is an online platform that helps people achieve financial independence. The startup provides educational resources, financial planning tools, and masterclass.