Paytm fires 1,000 employees as it aims to save 15 percent of staff costs

In a significant move to optimise operations and reduce staff costs by 15 per cent, One 97 Communications, the parent company of Paytm, has fired hundreds of employees. More than 1,000 employees across various departments at Paytm have been laid off, as per Economic Times. This initiative, executed over the past few months, has impacted divisions such as payments, lending, operations, and sales, affecting approximately 10 percent of Paytm’s overall workforce. The decision, rooted in performance-related concerns, reveals the company’s goal to improve profitability.

Many companies in the new economy sector, which includes modern businesses using advanced technology, have let go of over 28,000 employees in the first three quarters of this year. This shows that these companies are facing financial difficulties because it’s harder for them to get funding. Paytm, a big company in this sector, is also making changes that follow this trend. They’ve decided to cut jobs, especially in their lending business, which grew a lot in the past year.

A spokesperson from Paytm disagreed with the number of job cuts reported but confirmed that they are making these changes. The cited source said that the goal is to reduce staff costs by 10-15 percent in the current fiscal year. To mitigate the impact on its workforce, Paytm is actively incorporating AI-led automation to replace certain roles, particularly in areas affected by layoffs.

Concurrently, the company reportedly plans to strengthen its core payments business by hiring approximately 15,000 employees in the coming year. The spokesperson emphasized Paytm’s commitment to developing new products within its wealth management vertical and expanding its presence in the insurance distribution business, anticipating the creation of fresh job opportunities in these strategic areas.

As Paytm navigates these changes, the company aims to strike a delicate balance between cost optimization and growth, positioning itself for long-term sustainability in the dynamic financial services sector. It is currently unknown whether the company also provided severance pay to the employees who were laid off or the ones who will get fired soon.