The development comes after Vijay Shekhar Sharma, CEO and founder of Paytm, while sharing its list ahead of the New Year, called for user suggestions for the fintech app.
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The CEO shared that they have changed the Home Screen of the Paytm app. Paytm Payments Bank and the offerings of other group entities are clearly separated now, giving the app a cleaner look.
The company that introduced India to mobile payments is building an India-scale AI system that will help various financial institutions catch potential risks and fraud, while also protecting them from new types of risks due to advances in AI. By doing this, the company also optimizes its workforce as it eliminates repetitive tasks, and encourages its employees to adapt to AI.
A Paytm spokesperson said, “We are transforming our operations with AI-powered automation to drive efficiency, eliminating repetitive tasks and roles to drive efficiency across growth and costs, resulting in a slight reduction in our workforce in operations and marketing. We will be able to save 10- 15% in employee costs because AI delivered more than we expected it to. Additionally, we are constantly evaluating cases of inefficiency throughout the year,” as quoted by ANI.
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This series of job cuts has now positioned Paytm’s layoffs as one of the largest workforce reductions within a new age technology firm in India.
The company spokesperson further added, “Our core payment business may see manpower increase by 15,000 more in the coming year. With a dominant position in the payment platform and a proven profitable business model, we will continue to innovate for India. In this, Insurance and Wealth will be a logical expansion of our platform, continuing our focus on the existing businesses. Having demonstrated the strength of our distribution-based business model in loan distribution, we are expanding the same to focus on new businesses to drive scale.” Paytm reported operating profitability in early 2023, and is now aiming for EBITDA-level profitability. In Q2FY24, Paytm’s revenue from operations saw a 32% YoY growth to Rs2,519 Cr and its EBITDA before ESOP cost improved to Rs153 Cr compared to Rs84 Cr in Q1FY24 (excluding UPI incentives), ANI added.
Earlier in 2023, more than 15,000 employees were laid off across about 100 Indian startups, echoing the challenges of a prolonged financial winter, according to a Monfara report. Layoffs.fyi data revealed that Byju, struggling with financial constraints, laid off 2,500 employees in its second round of layoffs this year. In a determined effort to meet salary obligations, Byju’s founder, Byju Raveendran, went to the extent of pledging his home to secure funds for employee salaries.
This was followed by the exit of Raveendran from the list of the richest individuals, according to Hurun India Rich List 2023. The exit was cited to investor downgrades that Byju made. Once a favorite of India’s startup ecosystem, edtech development no longer features in the richest individual list for India.
Sources quoted by ET suggested that the majority of the job cuts at Paytm are likely to come from its lending business, which has seen significant growth in the past year.
Paytm Postpaid, known for giving loans smaller than ₹50,000, transitions to wealth management.
Despite Paytm’s recent success, its stock experienced a notable decline of around 20 percent on December 7. This decline followed the company’s announcement to discontinue the Paytm Postpaid loan plan.
The trend of layoffs extends beyond Paytm, as newer tech startups led to a large number of job cuts across India in 2023. Mohalla Tech Pvt Ltd, which runs social media platform ShareChat and short video platform Moj, laid off about 20 percent. of its employees due to “external macro factors” affecting the cost and availability of capital, as reported by Mint earlier this year. Additionally, Dunzo announced that it would cut its workforce by 30%, resulting in nearly 300 layoffs, earlier this year.
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Published: 25 Dec 2023, 12:38 IST