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Paytm To Wipe Off Upto 20% Workforce, Reason Is Not What You Think

Paytm is set to lay off between 5,000 to 6,300 employees as part of a cost-cutting initiative. The layoffs will mainly affect operations and marketing departments, driven by the company's shift to AI-driven automation to enhance efficiency and reduce costs by 10-15%. Despite this, Paytm plans to hire 15,000 new employees in its core payments business to support growth in new verticals like insurance and wealth management.

Edited By : News24 Desk | Updated: May 24, 2024 15:20 IST
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Image used for representative purpose only. (Photo Credit: Paytm)
Image used for representative purpose only. (Photo Credit: Paytm)

Paytm, the Indian digital payments giant under One97 Communications, is reportedly planning significant layoffs, potentially affecting between 5,000 to 6,300 employees. This move is part of a broader cost-cutting strategy aimed at improving financial efficiency amid ongoing business challenges.

The layoffs are expected to impact various departments, including operations and marketing. According to company statements, this reduction is linked to the annual performance review cycle, where roles deemed redundant or underperforming are targeted for cuts.

A significant factor driving these layoffs is Paytm’s shift towards AI-driven operations. The company aims to automate repetitive tasks, thereby reducing manpower needs and cutting employee costs by approximately 10-15%. This technological transition is seen as a step towards streamlining operations and enhancing efficiency, but it has also led to considerable anxiety among employees about job security.

Despite these cuts, Paytm continues to expand in other areas. The company plans to hire around 15,000 new employees for its core payments business over the next year. This expansion is part of a broader strategy to strengthen its market position and diversify into new verticals such as insurance and wealth management.

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The layoffs are not without controversy. Some reports indicate employee dissatisfaction regarding severance packages and the perceived lack of support during the transition. Additionally, the restructuring follows regulatory challenges faced by Paytm, particularly concerning its banking partnerships, adding further complexity to the company’s operational landscape.

Paytm’s layoffs are a multifaceted approach to balance cost efficiency with technological advancement while navigating regulatory pressures and market dynamics. The company’s efforts to innovate and expand, despite these challenges, reflect broader trends in the fintech industry towards automation and digital transformation.


First published on: May 24, 2024 03:15 PM IST

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