Fintech firm One97 Communications, the owner of the Paytm brand, has announced a restructuring initiative that includes laying off an undisclosed number of employees. In a company statement released on Monday, Paytm assured that it is providing outplacement support to ensure a smooth transition for the affected staff.
The restructuring comes in the wake of the Reserve Bank of India’s (RBI) ban on certain services provided by Paytm Payments Bank, significantly impacting Paytm’s operations. The sales employee headcount for the March 2024 quarter saw a reduction of approximately 3,500, bringing the total to 36,521 personnel, reflecting the challenges faced by the company.
“One97 Communications Limited (OCL) is providing outplacement support to employees who have resigned as a part of the restructuring efforts by the company,” Paytm stated.
In its commitment to assist displaced employees, Paytm’s human resource teams are collaborating with over 30 companies currently hiring. The company is offering support to those employees who have opted to share their information, facilitating their immediate outplacement.
“The company’s human resource teams are actively collaborating with over 30 companies that are currently hiring, and providing assistance to employees who have opted to share their information, facilitating their immediate outplacement,” the company said.
Additionally, Paytm emphasized its dedication to fairness and transparency in the restructuring process by disbursing due bonuses to the impacted employees.
“Paytm is also disbursing bonuses which were due to employees, ensuring fairness and transparency in the process,” the statement added.
The 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 from March 15 onwards, citing customer interest concerns. This regulatory action has contributed to Paytm’s financial difficulties.
As a result, Paytm reported a widened loss of Rs 550 crore for the January-March 2024 period, a significant increase from the Rs 167.5 crore loss posted in the same period the previous year.
In response to these challenges, One97 Communications highlighted its strategic focus on streamlining operations and enhancing profitability through technology.
“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.