Fintech giant Paytm, under its parent company One97 Communications, is reportedly set to trim its workforce by 15-20% in the current fiscal year, aiming to enhance efficiency and reduce employee costs. This move could see layoffs of around 5,000 to 6,300 employees, according to a report by Financial Express.
In its recent earnings statement, Paytm announced an employee cost-saving target of INR 400–500 crore, driven by reductions in certain areas while continuing to invest in technology, merchant sales, and financial services. The company had an average of 32,798 on-roll employees in FY23, with significant growth in its sales team, reaching over 36,000 in FY24.
Despite Vijay Shekhar Sharma’s assurances earlier this year that there would be no layoffs, the downsizing process is already underway. Reports from December indicated that 1,000 employees were laid off across various departments. Furthermore, the FY24 earnings report disclosed that over 3,500 sales employees were let go between December 2023 and March 2024, reducing the sales team from 40,000+ to around 36,500.
Paytm’s troubles began on January 31 when the Reserve Bank of India (RBI) restricted Paytm Payments Bank from accepting new deposits and top-ups, severely impacting its operations. As a result, Paytm’s net loss for Q4 FY24 widened to INR 550.5 crore, more than three times the loss of INR 167.5 crore reported in the same period the previous year. Revenue from operations also fell by 2.9% year-on-year to INR 2,267.10 crore, marking a 20% decline from the previous quarter.
Following the release of its Q4 results, Paytm’s shares continued their downward trajectory, declining by over 4% during the session on Friday, May 24.
This significant reduction in the workforce is a strategic move to navigate the current financial challenges and streamline operations amidst regulatory and market pressures.
