[ad_1]
Leading digital payments company Paytm has laid off at least 1,000 employees across multiple divisions, according to sources, as the company aims to reduce employee costs.
Confirming the development, Paytm’s spokesperson revealed that the operations and marketing teams have seen a decline as the company has transformed processes using Artificial Intelligence (AI).
“We are transforming our operations with AI-powered automation to increase efficiency, eliminating repetitive tasks and roles to increase efficiency across growth and costs, resulting in a slight reduction in our operations and marketing workforce,” shared the spokesperson told reporters.
The spokesperson added that the integration of AI-powered automation is likely to save Paytm 10-15% in employee costs as the technology has exceeded expectations in improving productivity. Further evaluations of non-performing employees are also carried out regularly throughout the year, the spokesperson said.
Reports indicate that Paytm initiated job cuts as early as October, including laying off employees in the backend operations team and call centers. The cuts come despite the company continuing to hire talent in leadership, engineering and product roles.
Industry experts pointed out that Paytm is following other major startups and technology companies that have recently resorted to layoffs to optimize costs amid global economic uncertainty. Rival fintechs like BharatPe and early-stage startups have also lost jobs in recent months.
Paytm highlighted that it plans to expand its workforce in its core payments business by 15,000 over the next year, underscoring its dominant position and proven profitability. The company is expanding into new verticals such as insurance and asset management, where it will hire new talent.
Therefore, while reducing repetitive roles, Paytm is focusing on driving growth by hiring in strategic business areas. By using automation, the company can also eliminate redundancies and improve efficiency.
The layoffs come weeks after Paytm announced it would scale back small loans under its BNPL product Postpaid and instead extend higher value loans. This caused a 20% crash in the company’s shares as analysts predicted a negative impact.
The broader startup ecosystem has witnessed significant layoffs at unicorns like Ola, Unacademy and Vedantu, as well as smaller companies, with over 20,000 job losses this year. Tighter investment flows and pressure on profitability were the reason for the cost savings.
Paytm is one of the largest of these companies, highlighting the environment of constrained spending. While technology creates new opportunities, the current macroeconomic environment has forced startups to focus on sustainability.
As Paytm and others lean in with tech-enabled optimization, industry experts predict Indian startups will become more resilient. But the job losses underscore the disruptive impact of technology alongside current economic challenges.