Paytm to cut jobs in restructuring efforts; offers outplacement support and bonuses for laid off staff

Fintech firm One97 Communications, the parent company of Paytm, is undergoing a significant restructuring, leading to layoffs of an undisclosed number of employees. However, the company is offering outplacement support to ensure a smooth transition for affected staff, according to a company statement.

Paytm Layoffs 2024

In the March 2024 quarter, Paytm's sales employee headcount dropped by approximately 3,500 to 36,521 personnel, primarily due to the Reserve Bank of India's (RBI) ban on certain services of Paytm Payments Bank.

The RBI had barred Paytm Payments Bank Limited (PPBL), an associate of Paytm, from accepting deposits, credit transactions, or top-ups in any customer accounts, wallets, and FASTags from March 15 onwards, citing customer interests, including those of merchants.

One97 Communications Limited (OCL) announced that it is providing comprehensive outplacement support to employees affected by the restructuring. The company's human resource teams are actively collaborating with over 30 companies that are currently hiring, facilitating immediate job placements for employees who have opted to share their information. Additionally, Paytm is disbursing due bonuses to ensure fairness and transparency in the process.

The impact of the RBI's restrictions has been significant. Paytm reported a widening loss of Rs 550 crore for the January-March 2024 period, a sharp increase from the Rs 167.5 crore loss recorded in the same period the previous year. This financial strain has accelerated the company's restructuring efforts.

In its FY24 earnings release, One97 Communications highlighted its strategy to prune non-core business lines and maintain a leaner organizational structure through AI-led interventions. The company reiterated its commitment to driving profitability, aligning with its strategic guidance.

This restructuring is part of Paytm's broader effort to navigate regulatory challenges and financial losses while positioning itself for sustainable growth in the future. The company's proactive measures aim to support displaced employees and streamline operations for enhanced efficiency.

Paytm shares rally

Meanwhile, the shares of One97 Communications extended its winning streak for the third consecutive session on Monday. During the early trade, the shares surged as much as 8.6% crossing the Rs 400 mark for the first time in 8 weeks to reach Rs 414.

This rally has also propelled the stock to gain 33.54% from its all-time low of Rs 310, touched in the second week of May. During Friday's trading session, the company's shares hit the 10% upper circuit limit, following a 2% gain in the previous session.

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