Paytm lays off over 1,000 employees as AI replaces humans
Paytm has laid off over 1,000 employees from its operations, sales, and engineering departments as a result of adopting AI automation. The fintech giant said it is "eliminating repetitive tasks and roles to drive efficiency across growth and costs." "We will be able to save 10-15% in employee costs as AI has delivered more than we expected it to. Additionally, we constantly evaluate cases of non-performance throughout the year," a Paytm spokesperson told Moneycontrol.
Layoffs are part of the lending team
The layoff decision primarily affects the lending team. "Their lending business is going very strong, however the team size they employed within was more than 30% of the total employees. They recently shut down small-ticket loans and BNPL (Buy Now, Pay Later) services. There is pressure to cut costs," a source told Moneycontrol. On December 6, Paytm announced its intention to scale back small-ticket postpaid loans while increasing high-ticket personal loans and merchant loans.
Paytm's Q2 revenue was up 32% and losses narrowed
Paytm's parent company, One97 Communications, has reported a 32% increase in consolidated revenue for the quarter ending September 2023, reaching Rs. 2,519 crore compared to Rs. 1,914 crore from the previous year. This growth has been credited to better payment processing margins and loan disbursement. The company's losses for Q2 of FY24 were Rs. 292 crore, a significant decrease from the Rs. 571 crore loss in Q2 of FY23. Paytm's ESOP expenses for the quarter amounted to Rs. 385 crore.
