Paytm fires over 1,000 employees across units; at least 10% on payroll hit: Report – Times of India

Paytm layoffs: One 97 Communications, the parent company of Paytm, has recently laid off over 1,000 employees across multiple units. The move comes as the publicly listed financial services firm aims to reduce costs and realign its various businesses. The job cuts have been implemented over the past few months, according to an ET report quoting sources.
This decision is expected to impact at least 10% of Paytm’s overall workforce. It follows Paytm’s withdrawal from small-ticket consumer lending and the ‘buy now pay later’ segment due to regulatory restrictions on unsecured loans by the Reserve Bank of India (RBI).
These layoffs mark one of the largest job cuts made by an Indian new-age tech company this year. Startups in the new economy sector have faced significant pressure as funding dried up for loss-making enterprises. In fact, data from search firm Longhouse Consulting shows that new economy companies have already sacked over 28,000 employees in the first three quarters of this year. In 2022, more than 20,000 employees were laid off, and 4,080 in 2021.
The majority of the job losses are expected to occur in Paytm’s lending business, which experienced significant expansion over the past year. Paytm Postpaid, the company’s initiative providing loans under Rs 50,000, has been affected by the changing regulatory landscape. As a result, Paytm is now shifting its focus towards wealth management and insurance broking.

Following the announcement of pulling out of Paytm Postpaid, Paytm’s stock plummeted by 20% on December 7. In response to queries from ET, a Paytm spokesperson disputed the number of employees being laid off but acknowledged the layoffs. The spokesperson stated that the company aims to save 10-15% of staff costs during the current fiscal year. Furthermore, many of the impacted roles have been replaced by AI-led automation. The spokesperson also mentioned that Paytm’s core payments business may witness a manpower increase of 15,000 in the coming year.

Paytm is actively working on building new products for its wealth management vertical and looking to establish a robust insurance distribution business. The new businesses will lead to the hiring of fresh talent while reducing teams in other areas. By the end of the fiscal year, Paytm intends to achieve the targeted 10-15% reduction in employee costs.
Read From ET | About Paytm layoffs
These layoffs have affected employees across various departments, including payments, lending, operations, and sales. Performance issues have been the primary reason for the job cuts, as the company prioritizes profitability.