Paytm lays off over 1000 employees as firm implements AI automation tech

In 2021 PayTm decided to let go of 500 to 700 employees based on non-performance.

Fintech major Paytm has laid off over 1000 employees from its operations, sales and engineering team after the firm implemented a slew of AI technology to improve efficiency.

"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 as AI has delivered more than we expected it to. Additionally, we constantly evaluate cases of non-performance throughout the year, " Paytm's spokesperson told Moneycontrol.

"Insurance and Wealth will be a logical expansion of our platform, in continuation of our focus on the existing businesses. Having shown the strength of our distribution-based business model in loan distribution, we are expanding the same to focus on new businesses to drive scale, "The Paytm spokesperson said.

In 2021 PayTm decided to let go of 500 to 700 employees based on non-performance.

Economic Times reported the development first.

Sources told Moneycontrol that the layoffs are part of the lending team.

"Their lending business is going very strong, however the team size they employed within was more than 30% of the total employees. They recently shut down small-ticket loans and BNPL services. There is pressure to cut costs," An industry source told requesting anonymity.

The company on December 7th announced plans to slow down its small-ticket postpaid loans while it looks to expand its high-ticket personal loans and merchant loans. The decision has not gone well with brokerages as well, prompting them to cut their revenue estimates for the company.

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The company said at its analyst meeting that its postpaid loans could fall to half, but it would not have any impact on margins or revenue. Postpaid had the lowest take rate and hence revenue impact will be minimal, the company added.

One97 Communications, the parent company of payments major Paytm, on October 20 reported a consolidated revenue of Rs 2,519 crore, up 32 percent for the second quarter ended September 2023 as against a revenue of Rs 1,914 crore last year, mainly on account of improving payment processing margins and growth in its loan disbursement.

The company’s losses were recorded at Rs 292 crore in Q2 of FY24 as against a loss of Rs 571 crore in Q2 of FY23.

The Noida-based company's ESOP expenses for the quarter stood at Rs 385 crore in Q2.