Paytm considers job cuts as losses mount after RBI clampdown
Paytm, a prominent fintech firm in India, is planning to streamline its operations and concentrate on core businesses, as revealed by CEO Vijay Shekhar Sharma in a recent shareholder letter. Sharma indicated potential layoffs due to escalating employee costs. He stated, "For the coming year...we expect reductions in other employee costs. We expect annualized people cost savings of ₹400-₹500 crore."
Paytm leverages AI for customer care and revenue generation
Sharma also highlighted the company's use of artificial intelligence to improve customer care, which he believes will lead to new revenue streams and cost savings. "We anticipate tangible results from these initiatives in the coming quarters, further bolstering our competitive advantage in the market," Sharma stated. This move is part of Paytm's broader strategy to enhance its financial health amid Q4 disruptions.
Paytm strengthens governance amid regulatory challenges
In his letter, Sharma also emphasized Paytm's commitment to enhancing its governance framework by appointing expert advisors and independent directors. He underscored the company's dedication to increased regulatory engagement and a heightened focus on compliance. This comes after the central bank halted Paytm Payments Bank Limited's (PPBL) banking services due to non-compliance with regulatory guidelines, effective March 15, 2024.
Paytm anticipates revenue impact due to Q4 disruptions
Sharma warned shareholders of an imminent financial impact on revenue and profitability due to disruptions in the last quarter, including the suspension of the PPBL wallet. Despite ongoing communication with merchants and stakeholders, Paytm expects the full impact of these disruptions to be reflected in FY25's first quarter results, with potential revenue falling to about ₹1,500 crore.
Paytm reports Q4 loss amid regulatory restrictions
Today, One 97 Communications, the company that operates Paytm, reported a net loss of ₹550 crore for Q4FY24 as compared to ₹169 crore in Q4FY23. This significant increase in loss is largely attributed to reduced margins following the RBI's ban on PPBL. The company's revenue also declined by 2.9% YoY at ₹2,267 crore. Furthermore, Paytm disclosed a write-off of ₹227.1 crore worth of investment in PPBL due to ongoing business uncertainties since the restrictions were imposed on January 31, 2024.
