A company spokesperson, without confirming the layoffs, said that Paytm is providing outplacement support to employees that have resigned
Meanwhile, a media advisory by the company termed reports of layoffs as “speculative” and “misleading”, adding that “no new” layoffs have taken place
In May, the company was said to be mulling laying off around 5,000 to 6,300 employees, which would result in savings of INR 400-500 Cr
As Reserve Bank of India’s (RBI) curbs loom heavy, fintech juggernaut Paytm
is reportedly looking to “lay off” an undisclosed number of employees as part of a restructuring plan.
A company spokesperson, without confirming the layoffs, told news agency PTI that it is providing outplacement support to employees that have resigned due to the ongoing restructuring exercise at the fintech startup.
“The company’s human resource teams are actively collaborating with over 30 companies that are currently hiring, and providing assistance to employees who have opted to share their information, facilitating their immediate outplacement… Paytm is also disbursing bonuses which were due to employees, ensuring fairness and transparency in the process,” the spokesperson told the agency.
However, Paytm issued a media advisory later today, saying reports of layoffs are “speculative” and “misleading”. Noting that “no new” layoffs have taken place, the company attributed the “employee transitions” to enhancement of AI-related automation and cost optimisation drive within the company.
“Reports of new layoffs at Paytm are speculative and misleading; no new developments have occurred. As outlined in our FY24 earnings, we continue to optimise our cost structure and enhance AI capabilities, focusing on core business. We handle all employee transitions with fairness, including providing full notice periods, due bonuses, and outplacement support, collaborating with over 30 organisations. We kindly request all media to ensure accuracy by verifying details before publication,” Paytm said in a post on X.
The development comes just weeks after reports surfaced that the fintech juggernaut was mulling trimming its headcount by around 5,000 to 6,300, or around 15-20% of the total workforce. As per the report, the retrenchments would result in cost-saving of INR 400-500 Cr.
In March, too, there were reports which said Paytm had directed “some departments… to reduce their team size by as much as 20%.”
In January during an earnings call, founder and CEO Vijay Shekhar Sharma said that the company would continue adding tech capabilities to its businesses to build a leaner workforce.
In December 2023, it also sacked hundreds of employees citing the increasing usage of AI-led automation.
These developments continue to weigh heavily on the fintech major as the company’s sales employee headcount dropped by 3,500 to 36,521 in the quarter ended March 2024. It was the same quarter during which the RBI imposed curbs on its payments bank arm.
The fintech giant was thrusted in uncharted waters in late-January this year after the central bank barred Paytm Payments Bank from accepting additional deposits and undertaking UPI transactions.
As a result, Paytm’s net loss widened over 3X year-on-year (YoY) to INR 550.5 Cr in the fourth quarter (Q4) of the financial year 2023-24 (FY24) compared to INR 167.5 Cr in the year-ago period. Meanwhile, revenue from operations also declined 2.9% YoY to INR 2,267.10 Cr in Q4 FY24.
Amid the growing uncertainty, the company has also seen multiple top-level leadership exits. Senior vice president of business at Paytm, Praveen Sharma resigned in March while chief marketing officer Sumit Mathur bid adieu to the startup in March.
Paytm Payments Bank’s CEO Surinder Chawla, Paytm’s COO Bhavesh Gupta and Paytm’s chief human resources officer Swati Rustagi have also left the fintech major in recent months.
Note: Updated at June 10, 10:30 PM. This story has been updated to include Paytm’s media advisory.
