Paytm Parent Company’s Workforce Reduction
One 97 Communications, the parent company of Paytm, is poised to downsize its workforce across various departments as part of its annual performance evaluation. This decision coincides with heightened scrutiny from the Reserve Bank of India (RBI) over the payment banks operated by the fintech unicorn, particularly due to lapses in due diligence. 
Although the precise number of affected employees remains undisclosed, insiders revealed that certain departments have been instructed to reduce team sizes by up to 20 percent over the past fortnight.
Company’s Response: Performance Review vs. Layoffs
A Paytm spokesperson confirmed that the ongoing performance appraisal process may lead to performance-driven layoffs. However, they refrained from specifying the exact figure. The spokesperson emphasized that rather than solely focusing on performance reviews, the company’s emphasis on AI-powered automation is also contributing to workforce adjustments.
The spokesperson underscored that these actions are part of the routine annual performance review process, distinct from layoffs, which are standard practices in any organizational setup. They reiterated the company’s commitment to driving operational efficiency through AI-driven automation, necessitating the restructuring of certain roles and responsibilities to align with growth and cost-efficiency objectives.
Employee Concerns and Market Response
Amidst apprehensions among employees, concerns have surfaced regarding potential terminations following a one-month Performance Improvement Plan (PIP), without severance packages.
Some employees have voiced fears of a more extensive downsizing compared to the previous round of layoffs in December 2023, which saw around 1,000 job cuts after the company’s adoption of AI technology. Additionally, allegations of undisclosed layoffs in January 2024 have surfaced, suggesting that the impending workforce reductions are unrelated to performance issues.
In light of these uncertainties, employees are actively exploring alternative career prospects. Reportedly, the job market currently accommodates over 6,000 individuals from Paytm seeking new opportunities, according to a report by specialist staffing firm Xpheno.
Despite regulatory challenges and internal restructuring, Paytm founder Vijay Shekhar Sharma reassured employees about their job security during a town hall meeting in February.
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