One 97 Communications, the parent company of Paytm, has strategically laid off over 1,000 employees, targeting a 15% reduction in staff costs. This initiative, executed over the past months, affects various departments, including payments, lending, operations, and sales, impacting around 10% of Paytm’s workforce. The move, driven by performance-related concerns, aligns with the company’s goal to enhance profitability in the face of financial challenges observed in the new economy sector. The sector, characterized by technologically advanced businesses, has witnessed over 28,000 job cuts in the first three quarters of the year due to increased difficulty in securing funding.
While a Paytm spokesperson disputed the reported number of job cuts, they confirmed the strategic changes. The company aims to decrease staff costs by 10-15% in the current fiscal year. To mitigate the impact, Paytm is actively integrating AI-led automation to replace certain roles, particularly in areas affected by layoffs.
In response to the restructuring, Paytm’s Founder and CEO, Vijay Shekhar Sharma, outlined his 2024 to-do list, emphasizing the separation of the Paytm app’s home screen and Paytm Payments Bank to enhance user experience. Beyond the app’s changes, Sharma envisions the expansion of AI in the company’s operations. Paytm is actively engaging its 10,000-strong technology, product, and engineering teams with Microsoft and Google’s AI tools.
The incorporation of AI in Paytm’s operations aims to reduce costs, enhance operational efficiency, and eliminate repetitive tasks. This shift is crucial for the fintech firm as it seeks to bolster its core payment business. The use of AI is expected to expedite product development, reducing timelines from weeks to days. Paytm anticipates saving at least 10% in employee costs through AI-powered automation, emphasizing efficiency gains and exceeding expectations in delivering results.
