One 97 Communications, the parent firm of Paytm, has laid off over 1,000 employees from its operations, sales, and engineering team as part of a strategic move to streamline its businesses and reduce costs, The Economic Times (ET) reported. According to the ET report, the layoffs, extending across the past few months, mark one of the most significant reductions workforce in an India company this year.
Paytm has implemented a slew of AI technology to improve efficiency. Paytm's spokesperson told Moneycontrol, "We are transforming our operations with AI-powered automation to drive efficiency, eliminating repetitive tasks and roles to drive efficiency across growth and costs, resulting in a slight reduction in our workforce in operations and marketing. We will be able to save 10-15 per cent in employee costs as AI has delivered more than we expected it to. Additionally, we constantly evaluate cases of non-performance throughout the year."
The majority of the job cuts stem from Paytm's lending business, which saw substantial growth in the past year. A Paytm spokesperson told ET that while the exact number of employees affected by this was not known, the company was working to reduce its staff costs by 10-15 per cent during the current financial year. The spokesperson added that at the end of September, Paytm had Rs 8,754 crore in cash balances.
As per the report, the layoffs have impacted over 10 per cent of Paytm's entire workforce. The decision to cut jobs is aligned with Paytm's broader efforts to realign its businesses. The fintech firm anticipates further cost-cutting measures in the upcoming months as it navigates changes in its operational structure.
In 2023, from the IT sector to edtech to start-ups, several firms conducted layoffs this year citing global headwinds and the funding winter among the major reasons behind these decisions.
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