Paytm lays off employees to improve cost efficiency; promises job outplacement to affected workers

One97 Communications, the parent company of Paytm, announced on June 10 that it is laying off an undisclosed number of employees as part of a restructuring plan initiated by CEO Vijay Shekhar Sharma in May. The company stated it will provide outplacement support to assist affected employees in their transition.

In a letter to shareholders on May 22, Sharma indicated that the firm would focus on its core businesses and enhance cost efficiencies, suggesting potential layoffs. Sharma mentioned that employee costs have increased significantly due to investments in technology and financial services.

The statement said, “One97 Communications Limited (OCL) is providing outplacement support to employees which have resigned as a part of the restructuring efforts by the company. The company's human resource teams are actively collaborating with over 30 companies that are currently hiring, and providing assistance to employees who have opted to share their information, facilitating their immediate outplacement.”

A Paytm spokesperson said, "Our employees are our most valuable assets, and their well-being is of paramount importance to us. As we navigate this period of transition, we are committed to upholding ethical standards and ensuring that our workforce is being provided with the necessary support. Our practices are guided by our longstanding commitment towards treating every employee with dignity, respect and fairness."

While these investments will continue, the company aims to reduce employee costs, potentially saving Rs 400-500 crore annually. The sales employee headcount for the fintech firm fell by about 3,500 to 36,521 in the March 2024 quarter, primarily due to the Reserve Bank of India's ban on Paytm Payments Bank services.