Pocket FM Layoffs for Workforce Efficiency

Pocket FM has announced a new wave of layoffs, affecting about 10% of its staff, as reported by sources to Startup Superb. This step seems to align with an initiative aimed at boosting efficiency and maximising revenue per employee. Sources indicate that the layoffs have impacted approximately 100 to 130 individuals across various teams, and these departures have been internally classified as performance-related.

The majority of employees affected, numbering around 90 to 100, have accepted severance packages and are currently on notice without active responsibilities. An additional 30 to 40 employees have been given an opportunity to improve their performance. It has been suggested that access to internal systems for these individuals may be limited by July 2026.

There are indications that these layoffs may not represent the end of cuts at Pocket FM. Another round could potentially affect up to 15% of the workforce by the end of June. This might coincide with a potential announcement about the company approaching $500 million in annual recurring revenue (ARR), although those plans are still under consideration, according to another unnamed source.

In addition to the layoffs, Pocket FM has restructured its contractual workforce, which includes designers and content writers. The company has formed a partnership with Quess Corp to transition over 2,000 contractual employees to the latter’s payroll. This transition is perceived not merely as a cost-saving measure but as an effort to enhance revenue per employee and refine operations.

In response to inquiries from Startup Superb, a Pocket FM spokesperson asserted that the information was incorrect and that the company is not engaged in any widespread layoffs. The spokesperson noted that, as with any high-performance organisation, there are regular performance reviews which might result in role-specific modifications. However, characterising this situation as large-scale layoffs is misleading. The company also refuted any further layoff plans in this statement.

Regarding Quess Corp, Pocket FM pointed out that it collaborates with external partners across various functions as part of standard workforce protocols to enhance efficiency and concentrate on core objectives, emphasising that this should not be perceived as restructuring or linked to layoffs.

Founded in 2018 by Rohan Nayak, Nishant Sinha, and Prateek Dixit, Pocket FM provides multilingual audio series and has expanded into markets such as the US. The company secured $103 million from Lightspeed Venture Partners in 2024, achieving a valuation between $750 million and $800 million, and is now aiming for a target between $100 million and $120 million at a valuation of $1.5 billion to $2 billion.

Last month, Rohan Nayak noted in a LinkedIn post that Pocket FM reached $450 million in annual recurring revenue (ARR). He highlighted that while it took six years to cross $200 million ARR, the firm achieved an additional $200 million in just 12 months, driven by AI-supported content creation and international expansion.

Pocket FM faces competition from Kuku FM, which raised $85 million in a Series D funding round last year, led by Granite Asia, and reported a revenue of Rs 242 crore for FY25. It also competes with Pratilipi, which secured $20 million in funding last year, led by Jungle Ventures.