Pocket FM’s employees and contractors are not very happy with the company.

In the past three months, several former employees have alleged that the entertainment startup’s toxic work culture is taking a huge toll on employees. Social media is rife with posts about employees in the company’s Indian offices who claimed to have been sacked without adequate notice.

And it’s not just employees in India complaining on social media. Inc42’s months-long investigation into the Bengaluru-based startup (with a parent entity in the US) has unearthed several issues at Pocket FM, including unhappy former contractual workers in the US, who have dragged the company to court.

As per multiple lawsuits filed against Pocket FM Corp in the US, the company is facing a potential class action lawsuit, even as nearly 80% of its revenue comes from the US. At least 11 “independent contractors” have alleged that Pocket FM circumvented a number of US statutes and laws related to the classification of workers, wage provisions and working conditions.

At the heart of these multiple complaints is the fact that Pocket FM has created a contractual trap and is deliberately misclassifying employees, not providing minimum wages, payroll records or severance pay upon termination and more.

Many of the plaintiffs in the US allege wrongful termination, failure to provide rest and meal periods, as well as retaliation from Pocket FM over raising these concerns.

Responding to Inc42, Pocket FM said the allegations are baseless and denied that there were any discrepancies in the hiring process of contracted workers in the US.

The company also said that in the content and entertainment industry, it is routine practice to engage contracted workers for short-term projects, but several former employees that we spoke to claim the company’s hiring policies is often opaque and does not hint at the short-term nature.

In many cases, employees in India have alleged that contracts are terminated well before a project ends and workers are left jobless without much notice.

But the fact is that the lawsuits could snowball into a major problem for Pocket FM, which earned close to $100 Mn in revenue from the US in FY24, according to CFO Anurag Sharma.

Given the revenue dependency on the US, the class action lawsuit against Pocket FM from former contractors could have very real implications on future growth.

However, beyond this, the allegations of a toxic workplace and aggressive deadlines for creative work has built a negative perception among creative professionals, many of whom have lashed out on social media and those with the option to sue the company have done so.

Pocket FM’s US Revenue Machine

Founded in 2018 by Rohan Nayak, Nishanth KS and Prateek Dixit, Pocket FM began as an audio entertainment platform, serving episodic content across multiple languages and genres, including romance, drama, thriller, fantasy, science........

© Inc42