One97 Communications, the owner of the popular Paytm application, has made the decision to lay off over 1,000 employees as part of cost-cutting measures and business alignment. This is one of the largest layoffs in the payment company industry in India and highlights the challenges faced by modern tech companies in the country.
The layoffs are a result of Paytm’s efforts to streamline operations and reduce expenses. There is speculation that further job cuts may occur in the coming months as the company continues its cost-saving initiatives. These layoffs have been gradual and have taken place over the past few months, impacting over 10% of Paytm’s total workforce.
One of the main areas affected by the reduction in workforce is Paytm’s credit services, which have seen significant growth in recent years. Sources suggest that the majority of the laid-off employees worked in this sector. Paytm Postpaid, the company’s credit program, focused on asset management and offering loans below 50,000 Indian rupees.
The decision to reduce the number of employees came after Paytm’s stocks took a significant hit this year, losing about 20% of their value following the withdrawal of the Paytm Postpaid credit plan. This situation, combined with the overall restructuring of the economy and lack of funding in the startup sector, has led to an increase in layoffs in modern tech companies in India.
According to data from Longhouse Consulting, startups account for the largest group in terms of employee layoffs in the country, with approximately 28,000 people losing their jobs this year alone. This is a significant increase compared to previous years, with 4,080 layoffs in 2021 and 20,000 in 2022. Some notable companies such as PhysicsWallah, Udaan, Third Wave Coffee, and Bizongo have experienced particularly high layoff rates.
The conclusion is that Paytm’s decision to significantly reduce its workforce reflects the greater challenges faced by Indian tech companies in the current economic situation. The company’s efforts to cut costs and align its operations reflect the need for flexibility and strategic decision-making in an ever-evolving industry.
FAQ
Will Paytm lay off more employees in the future?
There is no certainty regarding further waves of layoffs, but there is speculation that the company will continue its cost-saving measures if necessary.
Which area of Paytm’s operations was most affected by the workforce reduction?
The most layoffs occurred in the credit services sector.
How many people have lost their jobs in Indian startups this year?
Approximately 28,000 people have lost their jobs in startups in 2023 alone. This is a significant increase compared to previous years.
Definitions
One97 Communications – a company that owns the Paytm application and operates in the payment industry in India.
Paytm – a popular payment application in India that also offers other financial services.
Startup – a newly established company that develops innovative solutions in the market.
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