One97 Communications, a parent company for Paytm, plans to layoff a secret number of staff as part of an organizational restructure by which it will aim at reducing costs through operational efficiency that has not been disclosed so far although layoffs have been independently verified by Inc42, all that’s been said was that it is in a bid to transform operations. According to Economic Times reports at least.”
In a statement, the spokesperson said, “One97 Communications Limited is offering redundancy assistance to retired employees as part of the restructuring efforts of the company. The company expects to save Rs 400.” -500 crore annually in personnel costs due to restructuring.” ” It is planned to continue to invest in its merchant sales team and risk and compliance functions.
‘In March, Paytm directed some departments to reduce their team time by subsidizing up to 20% as part of their annual overall performance review. By March 2024, the company had a wide variety of 36,521 based on quarterly revenue’.
Paytm has faced major hurdles since January, starting on 31 January when Paytm Payments Bank was barred by the Reserve Bank of India from taking in new deposits or top-ups. This action by regulators has caused a lot of uncertainty for the company.
In the wake of these demanding situations, Paytm has had several management exits. In the month of February, founder and CEO Vijay Shekhar Sharma resigned from the board of Paytm Payments Bank. With his departure, several other key executives left the organisation, including Praveen Sharma, vice chairman of operations at One97 Communications; Sumit Mathur, One97 Communications CMO; Surinder Chawla, General Manager, Paytm Bank; Bhavesh Gupta, CEO of Paytm; and Swati Rustagi, Director of Human Resources.
Paytm’s net loss for the fourth quarter of FY rose sharply to Rs 550.5 crore, up 225% from Rs 167.5 crore in the fourth quarter of last year. Revenue from operations also declined by 2.9% to Rs 2,267.1 crore as compared to Rs 2,334 crore in the corresponding period last year
The group’s restructuring as well as measures reducing costs are believed to be important measures for following the current financial as well as regulatory environment. Despite financial drawbacks and management modifications, Paytm still focuses on its core business and strategic investments. Efforts by the company providing outplacement assistance aim at aiding affected staff in transitioning into new opportunities with ease.
One97 Communications’ reorganization is marked by tremendous job cuts and cost cutting measures, even as it keeps its key areas strategically invested in with less capacity for growth as it deals with internal challenges like regulator constraints and financial hemorrhaging to stabilize the business functions and enhance its financial situation.
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