Paytm Layoffs: Fintech may cut up to 6,300 employees

One97 Communications, the parent company of fintech firm Paytm is likely to cut a significant number of jobs amid increasing losses. As per Financial Express, the firm may reduce its workforce by 15-20%. The company is aiming to save Rs 400-500 crore by cutting costs, said Paytm founder Vijay Shekhar Sharma in a letter to shareholders.

Layoffs by One97 Communication

In FY23, the average cost per employee was at Rs 7.87 lakh and the company had an average of 32,798 employees on payroll, with 29,503 actively working. The total employee cost increased by 34% YOY to Rs 3,124 crore, raising the average cost per employee to Rs 10.6 lakh in FY24.

As per Financial Express, the reduction process has already begun, with over 1,000 employees terminated in December to streamline operations and cut costs. The company in an investor presentation noted that employee costs have risen due to investments in technology, merchant sales, and financial services. It further announced that the company will continue to invest in these areas while it plans to cut costs in other departments.

The firm is aiming to optimise its cost structure by leveraging artificial intelligence, focusing on core business areas, and rewarding high-performing employees by promoting them to leadership roles.

Paytm's Performance

In the January-March quarter, the company reported a net loss of Rs 550 crore as against Rs 168 crore the previous year. The revenue from operations also fell by 3% year-on-yearto Rs 2,267 crore in the March quarter.

On January 31, the Reserve Bank of India imposed restrictions on Paytm Payments Bank, preventing it from accepting new deposits and conducting credit transactions. These restrictions significantly impacted the company’s fourth-quarter results.

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