Paytm terminates 1,000 employees in a bid to cut down 15 percent of staff costs
Paytm has reportedly terminated more than 1,000 employees, impacting approximately 15% of its total workforce
In a significant effort to streamline operations and reduce staff costs by 15 percent, One 97 Communications, the parent company of Paytm, has initiated a substantial workforce reduction. According to the Economic Times, over 1,000 employees spanning various departments at Paytm have been affected by this move, impacting divisions such as payments, lending, operations, and sales. This constitutes approximately 10 percent of Paytm’s total workforce. The decision, driven by performance-related considerations, underscores the company’s commitment to enhancing profitability.
Reflecting a broader trend in the new economy sector, encompassing technologically advanced businesses, over 28,000 employees have been laid off by such companies in the first three quarters of this year. This trend suggests financial challenges, particularly in securing funding. Paytm, a prominent player in this sector, is aligning itself with this trend by implementing workforce adjustments, particularly in its flourishing lending business, which experienced significant growth in the past year.
While a spokesperson from Paytm contested the reported number of job cuts, they confirmed the ongoing organizational changes with the objective of reducing staff costs by 10-15 percent in the current fiscal year. To mitigate the impact on its workforce, Paytm is actively integrating AI-led automation to fill certain roles, especially in areas affected by the layoffs.
Simultaneously, the company reportedly plans to fortify its core payments business by hiring approximately 15,000 employees in the upcoming year. The spokesperson underscored Paytm’s dedication to developing new products within its wealth management vertical and expanding its footprint in the insurance distribution business. These strategic moves are anticipated to create new job opportunities in these areas.
As Paytm navigates these changes, the company is seeking to strike a delicate balance between cost optimization and growth, positioning itself for long-term sustainability in the dynamic financial services sector. The specifics regarding whether the company provided severance pay to the affected employees are currently undisclosed.
As it undergoes these transformative measures, the company is confronting the challenges of a rapidly evolving financial landscape. The decision to cut jobs and optimize costs aligns with broader industry trends, reflecting the need for financial technology companies to adapt to changing market dynamics.
The spokesperson , while contesting the reported number of job cuts, emphasized the strategic use of AI-led automation as a means to mitigate the impact on its workforce. This reflects an industry-wide shift towards embracing technology to enhance efficiency and drive innovation.
In contrast to the workforce reduction, Paytm is poised to strengthen its core payments business by significantly expanding its employee base in the coming year. The emphasis on hiring aligns with the company’s commitment to growth and underscores its confidence in the sustained demand for digital payment solutions.
Additionally, its’s focus on developing new products within its wealth management vertical and expanding its presence in the insurance distribution business signals a forward-looking approach. This strategic diversification aims to capitalize on emerging opportunities within the financial services sector, potentially creating a positive ripple effect on job creation.
As the company navigates this delicate balance between cost optimization and growth initiatives, Paytm remains a key player in shaping the future of financial technology in India. The evolving narrative reflects the broader challenges and opportunities inherent in the industry’s dynamic landscape, where adaptability and innovation become key drivers of long-term success.
Paytm has reportedly terminated more than 1,000 employees, impacting approximately 10% of its total workforce. The layoffs, carried out by One97 Communications, the parent company of Paytm, are part of a cost-cutting initiative and a strategic realignment of its various businesses. While Paytm contested the reported number of job cuts, it acknowledged the overall reduction in staff.
According to sources cited in the Economic Times, these layoffs occurred over the past few months and are considered among the most significant job cuts by an Indian new-age tech firm in the current year. The lending business at Paytm is said to have borne the brunt of the job cuts, especially considering its substantial expansion in the previous year.
Despite disputes over the exact number of terminated employees, a spokesperson from Paytm confirmed the layoffs and expressed the company’s intention to save 10-15 percent of staff costs throughout the current fiscal year. The spokesperson highlighted the adoption of artificial intelligence-led automation to fill most of the affected roles, focusing on driving efficiency and cost-effectiveness across various functions.
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