Paytm layoffs: Teams may be cut by 20% in size, says report. Company says employee assessment ‘routine’

Paytm parent company One 97 Communications is set to reduce its workforce across departments as part of its annual performance review, Moneycontrol reported citing sources. The move comes as the fintech unicorn's payment banks face scrutiny from the Reserve Bank of India (RBI) for lapses in due diligence.

While the exact number of affected employees remains undisclosed, sources told the publication that over the last two weeks, some departments have been asked to reduce team sizes by up to 20 percent.

Livemint could not independently verify this report.

Company Says Performance Review 'Routine', Not Layoffs

A Paytm spokesperson acknowledged that the ongoing appraisal cycle might result in performance-based job cuts, but did not give a number. They also added that rather than the performance exercise, more jobs would be affected by the company's push towards artificial intelligence-powered automation.

“We are in the midst of our annual appraisal cycle, a common practice across companies, where performance assessments may lead to adjustments based on performance evaluations and role suitability. It's crucial to understand that this process is distinct from layoffs, a routine aspect of performance evaluations in any organization,” the spokesperson said.

"We continue to transform our operations with AI-powered automation to drive efficiency. This involves redefining certain roles and tasks to better align with our growth and cost-efficiency goals,” the spokesperson added.

The spokesperson also contested that these are not strictly layoffs as appraisal and performance reviews are "routine" company activity.

“We are in the midst of our annual appraisal cycle, a common practice across companies, where performance assessments may lead to adjustments based on performance evaluations and role suitability. It's crucial to understand that this process is distinct from layoffs, a routine aspect of performance evaluations in any organization,” the spokesperson stated.

Employees Fear Job Terminations

Speaking to the publication, employees expressed concerns over the restructuring, alleging that affected staff is being placed on a one-month Performance Improvement Plan (PIP) with potential termination thereafter, without severance packages.

There is speculation that the number of people being let go this time is much larger than the 1,000 pink slips given in December 2023 after the company adopted AI, another employee told the publication.

One staff also alleged that "silent layoffs" occurred in January 2024, adding that the coming cuts are unrelated to performance.

Amid uncertainties, employees are actively seeking alternative opportunities. The job market currently hosts over 6,000 accessible talent from Paytm, as per a report by specialist staffing company Xpheno.

Notably, during a town hall in February, Paytm founder Vijay Shekhar Sharma assured the company's employees of their job security amid regulatory challenges and internal restructuring.