Paytm’s parent company, One 97 Communications, has laid off 1,000 employees across various departments, as part of a broader cost-cutting strategy.
The publicly listed financial services company announced that the layoff affects only 10% of the employee’s overall headcount, and comes on the back of Paytm, withdrawing from small-ticket consumer lending and the buy now pay later (BNPL) segment.
A significant number of affected workers are reported to be in the startup’s lending business, as well as payments and executives in operations and sales.
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Speaking on the layoff at the company, a spokesperson said the downsizing of the part of the workforce, was necessitated due to the transformation of operations with AI-powered automation to drive efficiency and eliminate repetitive tasks and roles, thereby driving efficiency and growth.
The spokesperson said,
“Our core business of payment may see manpower increase by 15,000 in the coming year. With a dominant position in the payments platform and a proven profitable business model, we will continue to innovate for India. We are transforming our operations with Al-powered automation, eliminating repetitive tasks and roles to drive efficiency across growth and costs, resulting in a slight reduction in our workforce within operations and marketing. Eventually, by the end of the fiscal year, the company intends to achieve the targeted 10-15% reduction in employee costs”.
Paytm had reported operating profitability in early 2023 and is currently aiming for EBITDA-level profitability. In Q2FY24, Paytm’s revenue from operations saw a growth of 32% YoY to Rs2,519 Cr, and its EBITDA before ESOP cost has improved to Rs153 Cr as compared to Rs84 Cr in Q1FY24 (excluding UP|incentives).
A report disclosed that Paytm is now focusing on building new products for its wealth management vertical. Also, it plans to build an insurance distribution marketplace to lead to the hiring of new talent, while other teams are being cut down.
Despite Paytm’s recent success, the stock hit the lower circuit, declining by 20%, on December 7, a day after the company said it would pay out from Paytm Postpaid and take a cautionary approach toward small-ticket loans going forward.
Founded by Vijay Shekhar Sharma, Paytm Payments Bank offers a Savings Account with no account opening charges or minimum balance requirements.
Every Paytm Payments Bank account holder is issued with a free Digital Debit Card at the time of account opening. Account holders can request a physical Debit Card through the Paytm Payments Bank section of their Paytm App.
Be it a zero balance savings account, spend analytics, digital passbook virtual debit card, fixed deposit, or money transfer, every feature has been thoughtfully created by Paytm Payments Bank to empower unbanked and underbanked Indians.
With over 300 million wallets and 30 million bank accounts, the payments company is driving financial inclusion in India.