In a substantial effort to streamline operations and cut down on staff expenses by 15 percent, One 97 Communications, the parent company of Paytm, has terminated the employment of hundreds of workers. According to the Economic Times, over 1,000 employees from various departments at Paytm have been let go in a move that has been implemented over the past few months. This initiative has impacted divisions like payments, lending, operations, and sales, affecting around 10 percent of Paytm’s total workforce. The decision, driven by performance-related issues, underscores the company’s aim to enhance profitability.
The occurrence follows after Vijay Shekhar Sharma, the CEO and founder of Paytm, invited user suggestions for the fintech app while sharing his New Year’s to-do list.
The layoffs align with Paytm’s exit from small-ticket consumer lending and the “buy now pay later” sectors, prompted by regulatory constraints imposed by the Reserve Bank of India (RBI). Despite a 32% increase in consolidated revenue, Paytm reported a net loss in the recent fiscal quarter. Previously having attained operating profitability, the company is now striving for EBITDA-level profitability.
Emphasising the utilisation of AI-driven automation
Pioneering mobile payments in India, the company is constructing a large-scale AI system tailored for the country. This system aims to assist financial institutions in identifying potential risks and frauds, safeguarding them against emerging threats resulting from AI advancements. Concurrently, the company is streamlining its workforce by automating repetitive tasks and promoting employee adaptation to AI.
A spokesperson from Paytm itself stated, “We are transforming our operations with AI-powered automation to drive efficiency, eliminating repetitive tasks and roles to drive efficiency across growth and costs, resulting in a slight reduction in our workforce in operations and marketing. We will be able to save 10-15% in employee costs as AI has delivered more than we expected it to. Additionally, we constantly evaluate cases of non-performance throughout the year.”