Decision taken due to cost cutting Paytm fired more than 1,000 employees

Paytm's parent company 'One 97 Communications Limited' has fired more than 1,000 employees. In the last few months, the company has made layoffs in different units. Economics Times has given this information in one of its reports.

According to the report, the company has fired employees to cut costs and is realigning its various businesses. The layoffs are estimated to affect at least 10% of One 97 Communications' total workforce.

According to the report, the layoff in Paytm is one of the biggest layoffs made by an Indian new-age tech firm this year. This year, the maximum number of employees were laid off from startups. The main reasons for this were lack of funding, restructuring of the business, cost-cutting and others.

Acknowledging the layoffs, a company spokesperson said, 'Paytm will cut 10%-15% staff costs during the current financial year. Roles involving Artificial Intelligence-based automation will be most affected by this. However, a company spokesperson disagreed on the number of employees laid off.

Recently Paytm has announced to change in the strategy of the loan business. On December 6, the company said that for this, it will offer large-size personal loans and merchant loans in collaboration with big banks and NBFCs. In this, lower-risk and highly credit-worthy customers will be targeted.

It will reduce loan distribution for ticket sizes less than Rs 50,000. NBFCs, i.e. Non-Banking Financial Companies, are companies that provide various banking services but do not have a banking license. According to the company's website, it has NBFC partners like Aditya Birla Capital, Hero Fincorp, Tata Capital and Fibe for loan distribution. They are also in the process of integrating a big bank.

In the second quarter of the financial year 2023-24 i.e. July-September, Paytm's net loss reduced by almost half to Rs 292 crore. The company's net loss in the same quarter a year ago was Rs 571.5 crore.

Growth in gross merchandise value (GMV), merchant subscription revenue and loan business helped the company reduce its losses. On October 20, the company released Q2FY24 results.

Paytm's revenue in the September quarter increased by 32% to Rs 2,519 crore, compared to Rs 1,914 crore in the same quarter a year ago. The company's direct expenses stood at Rs 1,093 crore in the September quarter.

Paytm's revenue has increased by 7% quarterly. Its revenue in the June quarter was Rs 2,341 crore. The company's net loss in the June quarter was Rs 358 crore.