In a significant move to optimize operations and reduce employee costs by 15 percent, Paytm’s parent company One97 Communications has laid off hundreds of employees. According to the Economic Times, more than 1,000 employees have been fired from various departments of Paytm. The initiative, implemented over the past few months, has impacted divisions such as payments, lending, operations and sales, affecting around 10 percent of Paytm’s total workforce. The decision, based on performance-related concerns, reflects the company’s goal of improving profitability.
Many companies in the new economy sector, which include modern businesses that use advanced technology, have laid off more than 28,000 workers in the first three quarters of this year. This shows that these companies are facing financial difficulties as it is difficult for them to obtain funding. Paytm, a big company in this sector, is also making changes following this trend. They have decided to cut jobs, especially in their lending business, which has grown significantly in the last year.
A Paytm spokesperson disagreed with the number of reported job cuts but confirmed that they are making these changes. The quoted source said the target is to reduce employee costs by 10-15 percent in the current financial year. To mitigate the impact on its workforce, Paytm is actively incorporating AI-based automation to replace some roles, especially in areas affected by layoffs.
Concurrently, the company reportedly plans to strengthen its core payments business by hiring around 15,000 employees in the coming year. The spokesperson emphasized Paytm’s commitment to develop new products within its wealth management vertical and expand its presence in the insurance distribution business, while looking forward to creating new employment opportunities in these strategic sectors.
As Paytm pursues these changes, the company aims to strike a delicate balance between cost optimization and growth, thereby positioning itself for long-term sustainability in the dynamic financial services sector. It is currently unknown whether the company has also provided severance pay to employees who were fired or who will soon be fired.
