Paytm lays off over 1,000 employees as part of cost-cutting measures

Paytm's parent company, One 97 Communications, has terminated over 1,000 employees from various departments as part of a strategic move to streamline its businesses and reduce costs, according to a report by The Economic Times (ET). The layoffs, extending across the last few months, mark one of the most significant workforce reductions in an Indian tech firm this year.

The layoffs, impacting more than 10 per cent of Paytm's entire workforce, follow recent developments such as the withdrawal of small-ticket consumer lending and the cessation of its "buy now pay later" lending segment on the UPI platform.

The decision to cut jobs is aligned with Paytm's broader efforts to realign its businesses. The fintech company anticipates further cost-cutting measures in the upcoming months as it navigates changes in its operational structure.

The majority of the job cuts stem from Paytm's lending business, which witnessed 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 fintech 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.

Paytm Postpaid, known for granting loans below Rs 50,000, is also transitioning towards wealth management. The company faced a setback as its stock plummeted approximately 20 per cent on December 7, triggered by the discontinuation of the Paytm Postpaid loan plan.

Industry layoff trends

Paytm's layoffs contribute to the growing trend of job cuts in Indian startups during 2023, with over 28,000 people laid off by new companies in just six months, as reported by ET. The acceleration in layoff rates has been ongoing since 2022, which saw global tech giants such as Meta and Amazon significantly reduce its staff.

Beyond Paytm, other tech startups like PhysicsWallah, Udaan, Third Wave Coffee, and Bizongo have witnessed substantial layoffs this year. Additionally, industry giants like Flipkart and Byjus opted not to provide appraisals to top performers, reflecting the evolving dynamics within India's tech ecosystem. The news also comes days after Fintech startup ZestMoney, announced that it would be shutting down after an unsuccessful attempt to revive its business.