Paytm has hinted at potential job cuts and plans to divest non-core assets following its first-ever decline in sales. In a letter to shareholders on Wednesday, 22 May 2024, Vijay Shekhar Sharma, CEO of Paytm, announced that the company will concentrate on its core businesses. The letter also specified the company’s plan to improve cost efficiencies to create a ‘leaner organization’.
Sharma noted that employee costs have risen significantly due to investments in tech and financial services. While these investments will continue, the firm will also take measures to reduce employee costs, potentially saving up to Rs 400-500 crore annually.
Additionally, the letter stated that the company is strengthening its governance framework by appointing experts as advisors and independent directors.
Sharma also warned of a near-term financial impact on revenue and profitability following disruptions in the last quarter, including the suspension of the PPBL wallet. This follows a regulatory probe by the Reserve Bank of India (RBI) into Paytm Payments Bank (PPBL), which has affected the company’s operations.
Despite these challenges, Paytm highlighted its strong growth momentum in core payments and financial services distribution businesses.
Recently, One97 Communications, the parent company of Paytm, will be cutting roles as a part of its annual appraisal process. Additionally, reports surfaced that several departments within the company experienced significant impact, resulting in a 50% decrease in headcount.
While it was anticipated that some positions may be trimmed during the routine appraisal process, employees were also allegedly being encouraged to opt for ‘voluntary resignation’.
