To reduce employee costs, Paytm parent One97 Communications has decided to let go of around 15-20 percent of the workforce for this fiscal, as per a report by the Financial Express.
In December last year, Paytm fired over 1,000 of its employees.
To reduce employee costs, Paytm parent One97 Communications has decided to let go of around 15-20 percent of the workforce for this fiscal, as per a report by the Financial Express.
Due to its ongoing losses, the company is trying to focus on an employee cost-saving plan that is around Rs 400 to Rs 500 crore. As a result of this, reportedly, the number of employees that could be reduced is 5,000–6,300. The company has already started the process to reduce its headcount.
In December last year, Paytm fired over 1,000 of its employees. The reason is the company’s focus on the usage of artificial intelligence (AI) to drive efficiency and reduce employee costs. As per ANI, 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 per cent in employee costs as AI has delivered more than we expected it to. Additionally, we constantly evaluate cases of non-performance throughout the year.”
In an investor presentation, the company highlighted how their employee costs increased due to investments in merchant sales, financial services, and primarily technology. While the company will continue its investment in the merchant sales team and risk and compliance functions, there will be a deduction in other employee costs, the company added.
As per the company, they can achieve significant cost efficiencies by concentrating on core business, optimizing cost structure, and utilizing artificial intelligence capabilities. However, it will keep rewarding "high-performing talent" by elevating them to positions of leadership and hiring fresh senior executives who will foster expansion.
Recently, Paytm released its Q4 FY24 results, where the company reported a net loss of Rs 550 crore in the January-March quarter from Rs 168 crore in the same period last year. In the March quarter, revenue from operations decreased 3 per cent year over year to Rs 2,267 crore.