Pocket FM in Legal Crosshairs as US Contractors Sue Startup

A number of former workers have claimed in the last three months that the poisonous work culture at Pocket FM is severely harming staff members. Posts regarding workers in the company's Indian headquarters who said they were fired without sufficient notice are common on social media.

And social media complaints aren't limited to Indian workers. During its months-long investigation, several media houses have reported that there are a number of problems at Pocket FM, including disgruntled former contractual employees in the US who have taken the company to court.

The startup is based in Bengaluru and has a parent company in the US. Even though the US accounts for almost 80% of Pocket FM Corp's income, the company is facing a possible class action lawsuit, according to many lawsuits filed against it in the US.

According to at least 11 "independent contractors", Pocket FM violated several US regulations and legislation pertaining to worker classification, wage provisions, and working conditions.

Contractual Trap of Pocket FM

The core of these numerous allegations is that Pocket FM has set up a contractual trap, purposefully misclassifies workers, fails to provide payroll records, minimum wages, severance compensation upon termination, and more.

In the US, a large number of applicants claim that they were fired without cause, that they were not given rest or meal breaks, and that Pocket FM retaliated against them for voicing these concerns.

In response to a media inquiry, Pocket FM denied that there were any disparities in the recruiting procedure of contractual workers in the US and stated that the accusations are unfounded. The company also stated that hiring contractual workers for short-term projects is standard procedure in the content and entertainment sector.

Employees in India have frequently complained that their contracts are terminated long in advance of a project's completion, leaving them unemployed with little warning.

The class action lawsuit filed against Pocket FM by former contractors may have significant effects on future growth due to the company's reliance on US income.

Beyond this, though, a bad reputation has been created among creative professionals due to claims of a hostile environment and strict deadlines for creative work. Many of these workers have taken to social media to vent their frustrations, and those who have the option to sue the corporation have done so.

Financial Outlook of Pocket FM

When Rohan Nayak, Nishanth KS, and Prateek Dixit founded Pocket FM in 2018, it was an audio entertainment platform that offered serial material in a variety of languages and genres, such as romance, drama, thriller, fantasy, and science fiction.

In the initial years, Pocket FM talked about developing a new category for audio series in India that was based on micro-transactions as a revenue model. The company's full attention was on the Indian market during this time.

Pocket FM's US launch was a huge success, and it might even be argued that its microtransaction method was always anticipated to perform better in the US due to the country's greater per capita income and established podcast consumption market.

 Although this could not be independently confirmed, Pocket FM said that its top line increased 68% in FY25 and that its global sales jumped 496% to INR 1,051.97 Cr in FY24.