In a significant move to streamline operations and cut staff costs by 15%, Paytm’s parent company, One 97 Communications, has initiated a major layoff affecting over 1,000 employees. The decision follows Paytm’s exit from small-ticket consumer lending and the ‘buy now pay later’ segment due to regulatory changes by the RBI. This strategic move is part of a broader trend in the startup ecosystem, where companies are reevaluating their operations amid funding challenges.
Cost-Cutting Drive at Paytm:
One 97 Communications, the parent company of Paytm, aims to reduce staff costs by 15%.
The move involves laying off more than 1,000 employees across various departments at Paytm.
Impact on Overall Headcount:
The layoffs are expected to affect at least 10% of Paytm’s overall headcount.
The decision reflects the company’s efforts to optimize operations amid changing market dynamics.
Withdrawal from Consumer Lending:
Paytm’s cost-cutting move is linked to its withdrawal from small-ticket consumer lending.
Regulatory changes by the RBI regarding unsecured loans contribute to the company’s strategic shift.
Industry-Wide Pruning Trend:
Paytm’s layoffs align with a broader trend of startups undergoing significant pruning in 2023.
Funding challenges have led to more than 28,000 employees being laid off in the first three quarters of 2023 across new economy companies.
Previous Years’ Layoff Statistics:
In 2022, new economy companies fired over 20,000 employees.
The trend started in 2021 when 4,080 employees were laid off in the startup ecosystem.
Paytm’s decision to lay off employees reflects the evolving dynamics in the startup landscape, where companies are making strategic adjustments in response to regulatory changes and funding challenges. As the industry navigates these shifts, the focus remains on sustainability and operational efficiency. The impact of these measures on affected employees and the overall startup ecosystem will be closely monitored. Stay tuned for updates on developments in the startup space.
