Paytm Layoffs: More Than 1000 Employees Fired Due To Cost Cutting Measures

Mumbai: Fintech startup Paytm has once again hit the headlines  with recent  reports indicating that it has initiated another round of layoffs, resulting in the expulsion of approximately 10 percent of its workforce. The parent company, One97 Communications, is said to have let go of over 1000 employees in this retrenchment, a move attributed to the company’s cost-cutting measures and a broader restructuring of its diverse business units.

According to sources cited in an ET report, these layoffs have transpired over the past few months, impacting employees across various sectors within Paytm. This downsizing, aimed at streamlining operations and reducing expenditures, marks one of the most significant workforce reductions in the history of Indian startups. Unfortunately, 2023 has proven to be a challenging year for startups in general, with more than 28 thousand employees being laid off in the first three quarters alone.

Looking back, the trend of layoffs in the startup ecosystem has been evident, with over 20 thousand employees laid off in 2022 and more than 4 thousand in 2021. The fintech sector is particularly feeling the strain, as evidenced by the impending closure of Zestmoney by the end of this month.

Paytm’s woes extend beyond workforce issues, with regulatory restrictions imposed by the Reserve Bank affecting its unsecured loans. Consequently, Paytm made strategic decisions to shut down small-ticket consumer lending and the buy now, pay later business. Notably, employees in these segments are reported to be the most affected by the recent wave of layoffs.

In addition to internal challenges, Paytm is facing difficulties in the stock market. Its shares have experienced a significant decline of about 28 percent in the last month and a staggering drop of more than 23 percent over the past six months. The situation worsened at the beginning of December when Paytm stock hit a lower circuit of 20 percent. The latest news of layoffs is likely to further impact the company’s stock negatively.