Fintech major One97 Communications and owner of Paytm brand on June 10 said it is laying off an undisclosed number of employees as part of its restructuring plan announced by chief executive officer Vijay Shekhar Sharma in May.
The company claimed that it will provide outplacement support for their smooth transition, according to a statement issued by the firm.
In a letter to shareholders on May 22, Sharma had said the firm will focus on its core businesses and improve cost efficiencies to create a leaner organization, hinting at the likelihood of layoffs in the future.
Sharma said the employee costs of the firm have risen significantly over the years because of their investments in tech and financial services. While investments will continue, the firm will also take steps to cut employee costs, Sharma said, adding that these measures could save up to Rs 400-500 crore annually.
The fintech firm's sales employee headcount in March 2024 quarter fell by about 3,500 to 36,521 personnel on a quarter-on-quarter basis, mainly due the impact of the Reserve Bank of India’s ban on services of Paytm Payments Bank.
"One97 Communications Limited (OCL) is providing outplacement support to employees which have resigned as a part of the restructuring efforts by the company."
The company statement said that its human resource teams are actively coordinating with over 30 firms that are currently hiring, and providing assistance to employees who have opted to share their information, facilitating their immediate outplacement.
However, Paytm, did not not disclose the number of employees affected by the restructuring.
"Paytm is also disbursing bonuses which were due to employees, ensuring fairness and transparency in the process,” the statement said.
The Reserve Bank of India (RBI) had barred Paytm Payments Bank Limited (PPBL), an associate of Paytm, from accepting deposits, credit transactions or top-ups in any customer accounts, wallets, and FASTags, keeping in view the interest of customers, including merchants from March 15 onwards.
Paytm has reported widening of loss to Rs 550 crore in January-March 2024, following the ban imposed by RBI on transactions related to its payments bank.
The company had posted a loss of Rs 167.5 crore in the same period a year ago. "As part of its FY24 earnings release, One97 Communications stated that it will be pruning its non-core business lines, and will continue its efforts to maintain a leaner organisation structure through AI-led interventions. The company has been actively working towards driving profitability, in line with its guidance,” the statement said.
With inputs from PTI
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
