One 97 Communications, the parent company of Paytm, will let go of more employees across departments as part of its annual performance review, at least four people familiar with the development told Moneycontrol.
This comes at a time when Paytm's payment banks has come under fire from the Reserve Bank of India (RBI) for lapses in due diligence.
While Moneycontrol could not ascertain the number of people who will be impacted, some departments have been asked to reduce their team size by as much as 20 percent, the sources cited above said.
The exercise began two weeks ago.
A Paytm spokesperson disputed the percentage of layoff and did not specify a number but said the company is in the midst of an annual appraisal cycle, which may lead to performance-based job cuts. Further, this is part of a larger AI-powered automation exercise which may impact some roles.
“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 in a statement.
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Further, the company said they are continuing to implement AI-powered automation in their operations, which may further impact certain roles.
"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 said.
Employees woes
“There are orders from the management to restructure teams by reducing the headcounts across functions. People are being called by the HR one by one to inform them about the layoff,” an employee said on the condition of anonymity.
He alleged that the company is not offering a severance package but rather putting the selected candidates on one month-performance improvement plan (PIP), starting March, which most likely will lead to termination. This will be followed by a 30-day notice period.
Another source said this round could be more significant than the last round in December, in which the company laid off 1000 employees following AI technology implementation to boost efficiency.
“I was communicated by the department head yesterday (March 12) about the order to trim workforce within the team. Not sure if the head would take the call or its from top level, but this will begin anytime soon. Other verticals have already initiated,” a second executive from one of the departments said, requesting anonymity.
Also Read: NHAI urges FASTag users to switch from Paytm to other banks before March 15 to avoid penalties
He further alleged that some silent layoffs took place in January wherein some employees were let go.
“This (20%) is over and above that. Ofcourse, it has nothing to do with performance,” he added.
Paytm has over 10,000 employees, data from LinkedIn shows.
Uncertainty looms
Post the January 31st clampdown on Paytm’s partner bank and its subsidiary—Paytm Payment Bank (PPB) by the RBI—employees have been reeling under fear of being handed out a pink slip, while Paytm goes all out to set its house in order, including overhaul in banking partnerships, fresh TPAP license, merchant migration, and countering miscommunication.
As the March 15 deadline approaches, all eyes will be on the implementation of these measures, ensuring a smooth transition for Paytm users.
Amidst the uncertainty, employees across verticals have been on a look out for safer pastures. The job market currently has over 6,000 active and accessible talent from Paytm, per the February report by specialist staffing company Xpheno.
According to Aditya Narayan Mishra, Managing Director and CEO of staffing company CIEL HR Services, 40 percent of the current employees in Paytm were actively seeking other job opportunities, despite management’s efforts to placate them.
Moneycontrol earlier reported that Paytm founder Vijay Shekhar Sharma had assured employees that there would be no layoffs.
“You are a part of the Paytm family, and there is nothing to worry about. Many banks are helping us,” Sharma said during a virtual town hall with employees on February 5.
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