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Sharan Hegde, the CEO of the financial literacy company 1% Club, has come under scrutiny following the announcement of a 15% workforce reduction. The layoffs have sparked debate, particularly given Hegde’s status as a prominent financial influencer, known for his career built around financial education and promoting sound money management.
In a LinkedIn post addressing the layoffs, Hegde acknowledged the irony of the situation. “I just laid off 15% of my workforce and I received a lot of messages from my friends and media asking if I’m going bankrupt. As a finance influencer who built his career around financial education, the irony isn’t lost on me,” he wrote.
The decision to downsize the company was attributed by Hegde to “redundant expenses” and “mistakes in hiring,” explaining that rapid growth had led to inefficiencies. However, some former employees have questioned the company’s financial management. One anonymous ex-employee took to Reddit to claim that the company had made poor financial choices, such as hiring more than 150 people and setting up a lavish office in Mumbai, despite having only ₹10 crore in funding.
Hegde addressed these concerns, clarifying that the Mumbai office, which spans 5,000 square feet, was funded entirely through the company’s profits, not from investor capital. “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 crore is currently invested in an FD earning 8.5% interest,” he explained.
Despite the layoffs, Hegde remains optimistic about the future of 1% Club, emphasizing the company’s strong revenue and profitability. He also highlighted the company’s commitment to developing new financial products and services. “This is our first cost-cutting exercise since the company began,” he noted, adding that AI-driven strategies were being implemented to improve efficiency and profitability.
However, the timing of the layoffs, occurring just after the Diwali holidays, has sparked frustration among former employees. One ex-employee expressed their dismay, especially as many had recently relocated for their roles. “I’m pretty pissed and feel for everyone else who got axed with me,” the anonymous individual said. They also claimed that various senior employees, including VPs, AVPs, and most of the content team, were let go.
The former employee also accused 1% Club of financial mismanagement, sarcastically stating, “Let’s hope they learn ‘financial literacy’ on their own, as they seem to need it more than their clients.”
In response to the criticism, Hegde emphasized that both he and co-founder Gupta had personally funded the company’s growth, operating on a bootstrapped model without external investment capital. “We’ve been running this company bootstrapped, without investor capital, because we’re very strict about financial planning and diligence,” Hegde said.
Acknowledging the impact of the layoffs on the affected employees, Hegde assured that a generous severance package based on tenure had been provided, and that efforts would be made to connect those laid off with new job opportunities in the industry.
Hegde, a mechanical engineering graduate from Bengaluru and a former KPMG and PwC employee, had launched the “Finance With Sharan” YouTube channel in 2021 to promote financial literacy. The channel has since gained a large following, with 3.29 million subscribers and over 500 videos on topics ranging from personal finance to investment strategies.
While the layoffs have raised questions about the company’s financial planning, Hegde’s transparency and commitment to guiding those affected may help maintain his reputation as a trusted figure in the financial space.
Sources By Agencies
