Digital payments firm Paytm is reportedly contemplating a workforce reduction of approximately 15-20 per cent in the ongoing financial year as part of its strategy to reduce employee costs. In the last fiscal year, FY23, the company maintained an average workforce count of 32,798, with 29,503 actively contributing to its operations.
During this period, the average cost per employee was recorded at Rs 7,87,000. However, in FY24, Paytm witnessed a substantial 34 per cent year-on-year increase in total expenditure, soaring to Rs 3,124 crore. This surge likely elevated the average employee cost to an estimated Rs 10,60,000, reflecting the company's evolving financial dynamics, as per a report by the Financial Express.
Paytm aims to cut workforce to slash costs
In response to escalating losses, Paytm has launched an ambitious plan aimed at reducing its employee costs by a significant margin, targeting savings in the range of Rs 400-500 crore. This initiative may potentially entail a workforce reduction of around 5,000-6,300 employees. Already in motion, the downsizing process has commenced, with reports indicating that over 1,000 employees were let go across various departments in December of the preceding year.
While the exact tally of employees for FY24 remains undisclosed, Paytm is resolute in its efforts to rationalize its cost structure. Leveraging the power of Artificial Intelligence (AI) capabilities, the company aims to achieve substantial savings. By concentrating on its core operations, Paytm is reportedly looking to navigate through the financial challenges more effectively.
Meanwhile, Paytm stated that the company remains committed to nurturing talent within its workforce. The company plans to identify and promote high-performing individuals to leadership positions, ensuring continuity and fostering a culture of growth. Additionally, Paytm is actively recruiting new senior executives to spearhead strategic initiatives and drive sustainable growth in the long term, as per the company.
Paytm COO Bhavesh Gupta quits
Earlier this month, Paytm's parent company One97 Communications president and Chief Operating Officer (COO) Bhavesh Gupta resigned from the company. Gupta was steering the lending business, online and offline payments, and compliances, among others, at Paytm. According to reports, verticals, headed by him, were adversely impacted by the RBI's ban on Paytm Payments Bank (PPBL) from carrying on new transactions. He will be relieved from the services of the company on May 31.
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