Paytm Layoffs 1000 Employees; A Significant Workforce Reduction

Paytm’s parent company, One97 Communications has made a significant workforce reduction and has decided to lay off more than 1000 employees across various departments as part of its broader cost-cutting strategy, as reported by the Economic Times.

Paytm’s CEO Vijay Shekhar Sharma calls for user suggestions ahead of the New Year coinciding with the unveiling of a revamped Paytm, app home screen. The company aims to streamline its offerings with Paytm Payments Bank and other group entities now distinctly separated on the app giving it an enhanced look.

The reason behind this workforce reduction is the underlying commitment of Paytm to build an India-scale AI system that will assist financial institutions in identifying risks and fraud. The company aspires to optimize its operations with AI-powered automation, eliminating repetitive tasks and roles. This will also encourage employees to adapt to the advancements in AI.

The company will transform its operations with AI-powered automation to drive efficiency and eliminate repetitive tasks and roles to drive efficiency across growth and costs. And, this supposedly resulted in a reduction of their workforce in operations and marketing. The move is expected to save about 10 -15% in employee costs exceeding initial expectations.

Despite these layoffs, Paytm remains focused on innovation and expansion. The company reported operating profitability in early 2023 and is now aiming for EBITDA-level profitability. In Q2FY24, Paytm’s revenue from operations grew 32% Y0Y to 2519 Cr, indicating a positive trajectory, as reported by ANI.

The layoffs at Paytm align with a broader trend in the Indian technology sector where over 15000 employees were laid off across approximately 100 startups in 2023. It is a possibility that the majority of the job cuts at Paytm are likely to come from its lending business with a shift towards wealth management. Paytm Postpaid known for granting smaller loans is undergoing this transition.

Although the company has faced a recent stock decline and the discontinuation of the Paytm Postpaid loan plan, Paytm remains a dominant player in the payments platform in the market. The company still aims to continue its focus on existing businesses while expanding into areas like insurance and wealth management to drive scale.