Paytm lays off over 1000 employees in major cost-cutting move; More layoffs expected

Paytm's parent company, One 97 Communications, has initiated a significant layoff, reportedly letting go of over 1000 employees across various departments, marking the most extensive workforce reduction in the company's history. The move is part of a cost-cutting strategy as Paytm undergoes realignment in various business segments, with potential for more layoffs in the upcoming months, as reported by the Economic Times.

The layoffs, which have occurred over the past few months, are expected to impact over 10 percent of Paytm's entire workforce. Notably, the company's stock experienced a sharp decline of around 20 percent on December 7 after announcing the withdrawal of the Paytm Postpaid loan plan, impacting its UPI platform's small-ticket consumer lending and "buy now pay later" lending segment.

The majority of the job cuts in Paytm are anticipated to be concentrated in its lending business, which has seen remarkable growth over the past year, particularly in Paytm Postpaid's loan offerings under ₹50,000. However, amidst the layoffs, Paytm is diversifying its business towards wealth management.

The situation mirrors a broader trend across India's startup landscape, where new tech startups have witnessed a surge in job cuts in 2023. According to data from Longhouse Consulting, around 28,000 people were laid off by new startups this year, a substantial increase from 2021 and 2022. The layoffs signal a challenging landscape for startups amid economic restructuring, funding uncertainties, and market dynamics.