AI strikes down humans as Paytm sacks over 1,000 employees in the name of ‘efficiency’
Paytm has sacked more than 1,000 employees as it is “transforming” its operation with artificial intelligence (AI)-powered automation to improve efficiency.
One 97 Communications, parent of Paytm, said the employees of multiple units including operations, sales and engineering teams.
‘AI has delivered more than expected’
A report by Moneycontrol quoted Paytm spokesperson saying, “We are transforming our operations with AI-powered automation to drive efficiency, eliminating repetitive tasks and roles to drive efficiency across growth and costs, resulting in a slight reduction in our workforce in operations and marketing.”
‘Save 15% employee costs’
“We will be able to save 10-15 per cent in employee costs as AI has delivered more than we expected it to. Additionally, we constantly evaluate cases of non-performance throughout the year,” Paytm’s spokesperson further said.
A report by Economic Times quoted a person saying the job cuts in Paytm took place over the last few months.
The Paytm layoff is among the steepest job cuts implemented by an Indian new-age technology company in 2023.
Back in 2021, Paytm had decided to remove 500 to 700 employees based on non-performance.
Layoffs part of lending team
The Moneycontrol report quoted sources further informing that the layoffs are part of the lending team.
“Their lending business is going very strong, however the team size they employed within was more than 30 per cent of the total employees. They recently shut down small-ticket loans and BNPL services. There is pressure to cut costs,” the report mentioned an industry source as saying, requesting anonymity.
On 7 December, the company had announced its plans to slow down its small-ticket postpaid loans plan and wants to expand its high-ticket personal loans and merchant loans. The decision of the firm did not go well with brokerages as well, prompting them to cut their revenue estimates for the company.
Stocks of Paytm on the same day took a major hit, falling around 20 per cent.
With inputs from agencies
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