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New Delhi: In a move that reflects a broader trend of workforce cuts in the new economy sector, Paytm’s parent company One97 Communications has announced significant layoffs. The company plans to lay off more than 1,000 employees, effectively reducing its employee costs by 15 percent in an effort to increase profitability. The layoffs, which amount to about 10 percent of the company’s workforce, are spread across various departments including payments, lending, operations and sales.
The decision, which comes after the company announced it was scaling back its small-ticket loan business, is indicative of broader trends in the tech and startup sectors. These industries are currently in the phase of reappraisal, cost optimization and leveraging automation to improve operations.
Multinational financial tech giant Paytm’s strategy to offset these cutbacks includes the integration of AI-led automation to take over some of the roles previously performed by humans. The move is seen as a step towards increased efficiency and cost-effectiveness, in line with the company’s vision of continued growth and profitability.
Paytm’s layoffs are attributed to increased AI-led automation, which aims to increase efficiency, eliminate repetitive tasks and roles, and save costs. The company expects to reduce employee costs by 10-15% due to the efficiency provided by AI.
Concurrently, the company reportedly plans to strengthen its core payments business by hiring approximately 15,000 employees in the coming year. The focus of this hiring drive will be to strengthen its core payments business and expand new products in wealth management and insurance distribution. This balanced strategy is designed to optimize costs while driving growth, making Paytm a competitive player in the financial services industry.
Details regarding severance pay for affected employees are unknown. This comes at a time when Paytm’s shares had fallen by almost 20 percent on December 7. The company’s move to lay off a large number of employees comes amid an industry-wide trend, where more than 28,000 employees have already been laid off. three quarters of the year due to financial stress and difficulties in securing funding.
