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Paytm Implements Workforce Reduction to Cut Costs by 15 percent
Paytm slashes 1,000 jobs to cut costs by 15%, emphasizing AI-led automation and strategic hiring for sustained growth and innovation.
In a strategic move aimed at optimizing operations and trimming staff costs by 15 per cent, One 97 Communications, Paytm's parent company, has initiated a significant downsizing. Recent reports indicate that over 1,000 employees across diverse departments at Paytm have been affected by this measure, impacting areas such as payments, lending, operations, and sales. Executed over the past few months, this workforce reduction constitutes approximately 10 per cent of Paytm's total workforce. The decision, attributed to performance-related considerations, underscores the company's commitment to enhancing profitability.
Within the new economy sector, encompassing businesses leveraging advanced technology, more than 28,000 employees have faced layoffs in the year's first three quarters. This trend reflects the financial challenges encountered by companies in this sector, grappling with increased difficulty in securing funding. As a major player in this landscape, Paytm is aligning its strategies with this prevailing trend, opting to streamline its workforce, particularly in the thriving lending business that witnessed substantial growth over the past year.
While a Paytm spokesperson disputed the reported number of job cuts, they confirmed implementing these changes. The spokesperson asserted that the primary objective is to reduce staff costs by 10-15 per cent in the current fiscal year. To mitigate the impact on the workforce, Paytm is actively embracing AI-led automation to replace certain roles, especially those affected by the recent layoffs.
Simultaneously, the company intends to fortify its core payments business by hiring approximately 15,000 employees in the upcoming year. The spokesperson emphasized Paytm's commitment to innovating new products within its wealth management vertical and expanding its footprint in the insurance distribution business. This strategic focus is anticipated to generate fresh job opportunities in these specific areas.
As Paytm navigates these organizational changes, it aims to balance cost optimization and growth, positioning itself for long-term sustainability within the dynamic financial services sector. The details regarding severance pay for the affected employees remain undisclosed, leaving uncertainties regarding the compensation provided to those who have been or will be laid off.
