In a recent development, Paytm’s parent company, One 97 Communications, has decided to initiate a large-scale layoff affecting over 1,000 employees across various departments. The move comes as part of the company’s broader efforts to cut costs and realign its diverse businesses. According to reports from the Economic Times, this represents one of the most substantial layoffs in a new-age tech firm in India, impacting more than 10 percent of Paytm’s entire workforce.
The layoffs, occurring over the past few months, are expected to extend to more departments in the coming months as Paytm undergoes significant restructuring. The decision follows the withdrawal of the small-ticket consumer lending and “buy now pay later” lending segment from the UPI platform. The majority of the job cuts are anticipated to come from Paytm’s lending business, particularly impacting its Paytm Postpaid segment, which typically offers loans smaller than ₹50,000 but is now moving towards wealth management.
Paytm’s stock experienced a sharp decline of around 20 percent on December 7, coinciding with the announcement of the withdrawal of the Paytm Postpaid loan plan. This reflects the challenges the company has faced in the financial landscape. The layoffs in Paytm contribute to a larger trend in India, with startup companies leading in job cuts this year due to factors such as funding constraints and economic restructuring.
Data from Longhouse Consulting reveals that new tech startups across the country have collectively laid off approximately 28,000 employees this year, a significant surge compared to the previous two years. In 2021, only 4,080 people were laid off, and in 2022, the number increased to 20,000. The majority of the 28,000 layoffs occurred within a span of six months, highlighting the challenging landscape for startup employees.
Various startup companies, including PhysicsWallah, Udaan, Third Wave Coffee, and Bizongo, experienced high layoff rates. Additionally, some established firms like Flipkart and Byjus chose not to provide appraisals to their top performers this year. This wave of layoffs across the startup ecosystem reflects the broader economic challenges faced by companies in Bharat during 2023.
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