Paytm lays off over 1000 employees and replaces them with AI in order to reduce cost. In 2023, following the trend of layoffs, Paytm’s parent company, One 97 Communications, made a significant move, letting go of over 1,000 employees as part of a broader cost-saving strategy, reported by the Economic Times.
This decision came after Vijay Shekhar Sharma, CEO and founder of Paytm, reached out for user suggestions ahead of the New Year to enhance the fintech app. Changes were implemented, revamping the app’s Home Screen and clearly distinguishing offerings like Paytm Payments Bank from other group entities, giving the app a cleaner look.
While pioneering mobile payments in India, the company is also focusing on building an India-scale AI system. This system aims to assist financial institutes in identifying potential risks and frauds, a step forward in safeguarding against evolving risks due to AI advancements. Simultaneously, this move involves streamlining tasks, prompting employees to adapt to AI as repetitive tasks get automated.
A spokesperson from Paytm stated, “We’re evolving our operations with AI-powered automation to drive efficiency, streamlining tasks, resulting in a slight reduction in our operations and marketing workforce. With AI delivering beyond expectations, we anticipate saving 10-15% in employee costs. We continuously evaluate performance throughout the year,” as quoted by ANI.
These layoffs at Paytm highlight one of the most substantial employee reductions among contemporary tech firms in India. However, the spokesperson emphasized a potential increase of 15,000 jobs in their core payment business in the coming year, focusing on innovation and expanding into sectors like Insurance and Wealth management.
Despite earlier layoffs across Indian startups due to funding challenges, Paytm reported operating profitability and aims for EBITDA-level profitability. In Q2FY24, Paytm’s revenue from operations grew by 32% YoY to Rs 2,519 Cr, marking positive growth.
Beyond Paytm, other tech startups have also faced workforce reductions. Mohalla Tech Pvt Ltd and Dunzo announced significant layoffs due to external factors impacting capital availability and costs, underscoring the broader challenges across the tech industry in 2023.
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