Fintech giant, One97 Communications, which is also the parent company of Paytm, has announced layoffs affecting an undisclosed number of employees. The company is providing outplacement support to ensure a smooth transition for those affected.
According to media reports, One97 Communications is collaborating with over 30 companies currently hiring, assisting employees who have opted to share their information for immediate outplacement.
One97 Communications outlined its strategy in the FY24 earnings release. The strategy indicated the company’s plans to streamline operations by pruning non-core business lines and maintaining a leaner organisational structure through AI-led initiatives. The company remains focused on driving profitability in line with its guidance.
During the March 2024 quarter, Paytm’s sales employee headcount dropped by about 3,500 to 36,521. This reduction was primarily attributed to the Reserve Bank of India’s (RBI) ban on services provided by Paytm Payments Bank.
In their statement, One97 Communications emphasised their commitment to fairness and transparency, noting that bonuses due to employees are being disbursed. Despite the layoffs, the company has not disclosed the exact number of employees impacted.
The RBI had previously barred Paytm Payments Bank from accepting deposits, credit transactions, or top-ups in any customer accounts, wallets and FASTags. This restriction has significantly impacted Paytm’s financial performance, leading to a reported loss of Rs 550 crore in the January-March 2024 period, compared to a loss of Rs 167.5 crore in the same period the previous year.
Paytm also hinted at potential job cuts and plans to divest non-core assets following a first-ever decline in sales last month. In a letter to shareholders on Wednesday, 22 May 2024, Vijay Shekhar Sharma, CEO, Paytm, announced that the company will concentrate on its core businesses. The letter also specified the company’s plan to improve cost efficiencies to create a ‘leaner organisation’.
