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Synopsis : One97 Communications, the parent company of Paytm, has announced layoffs as part of a restructuring plan to enhance cost efficiency and focus on core business areas. CEO Vijay Shekhar Sharma highlighted the need to reduce employee costs, aiming for annual savings of Rs 400-500 crore. The sales employee headcount dropped significantly due to the Reserve Bank of India's ban on Paytm Payments Bank services. The company will provide outplacement support to affected employees during the transition.
One97 Communications, the parent company of the popular digital payment platform Paytm, has announced a significant restructuring plan that includes laying off an undisclosed number of employees. This move, initiated by CEO Vijay Shekhar Sharma, aims to improve cost efficiency and sharpen the company's focus on its core business operations.
In a letter addressed to shareholders on May 22, Sharma highlighted the need to concentrate on the firm's primary business areas while improving cost efficiency. He pointed out that employee costs have surged, primarily due to substantial investments in technology and financial services. While these investments are set to continue, the company is now looking to cut employee-related expenses, with an estimated annual saving of Rs 400-500 crore.
The layoff decision, publicly announced on June 10, forms part of a broader restructuring strategy that Sharma hinted at last month. The company has assured that it will provide outplacement support to assist affected employees during their transition period.
The reduction in workforce is also reflected in the latest figures from the March 2024 quarter, where the sales employee headcount dropped by approximately 3,500, bringing the total down to 36,521. This decrease is partly attributed to the Reserve Bank of India's ban on Paytm Payments Bank services, which has had a considerable impact on the company's operations.
