Paytm fires employees as part of restructuring, says 'We are providing outplacement support'

Ever since the Reserve Bank of India (RBI) took significant regulatory action against the Vijay Shekhar Sharma-led Paytm Payments Bank, the company has been struggling.

Paytm's parent company, One97, has now laid off an undisclosed number of employees as part of its restructuring process.

Providing outplacement support

While the company didn't reveal the exact number of affected employees, is providing outplacement support, collaborating with over 30 companies that are currently hiring, and assisting those who have chosen to share their information to facilitate their immediate outplacement.

"Our employees are our most valuable assets, and their well-being is of paramount importance to us. As we navigate this period of transition, we are committed to upholding ethical standards and ensuring that our workforce is being provided with the necessary support," said a Paytm spokesperson.

What led to the layoffs?

The reduction in the workforce comes after Paytm faced significant challenges, including the Reserve Bank of India's (RBI) ban on Paytm Payments Bank services. 

The ban, effective from March 15, 2024, prohibited the bank from accepting deposits, credit transactions, or top-ups in any customer accounts, wallets, and FASTags.

The ban was imposed to prioritize the interests of customers, including merchants. Consequently, Paytm's sales employee headcount dropped by approximately 3,500 to 36,521 personnel in the March 2024 quarter.

The move is also part of a broader effort by the company to streamline its operations and focus on core business areas to enhance cost efficiencies.

Maintaining fairness and transparency

Despite the layoffs, Paytm has assured that it will continue investing in its technology and financial services.

Paytm also stated that it is ensuring fairness and transparency in the process by disbursing bonuses that were due to employees.

"Paytm is also disbursing bonuses which were due to employees, ensuring fairness and transparency in the process," the company said. The move is aimed at maintaining morale and motivation among the remaining workforce while navigating through the restructuring phase.