Paytm replaces 1,000 employees with AI to save 15% on cost

Paytm lays off 1,000 employees: Vijay Shekhar Sharma-backed Paytm, a leading fintech platform in the country, has chosen to lay off 1,000 employees after implementing AI automation for repetitive tasks and ‘drive efficiency’ across operations. These jobs were cut from the operations, sales and engineering verticals of the company and will enable Paytm to save up to 10-15 per cent on employee costs, according to the official statement released by the company. 

Paytm spokesperson said, "We are transforming our operations with AI-powered automation to drive efficiency, eliminating repetitive tasks and roles to drive efficiency across growth and costs, resulting in a slight reduction in our workforce in operations and marketing.” 

AI is better than expectations

Paytm has indicated that the integration of AI technologies has exceeded the company’s expectations, enabling the company to achieve higher efficiency. The company has also stated that the performance metrics of the employees were also the reason behind this layoff. 

“We will be able to save 10-15 per cent on employee costs as AI has delivered more than we expected it to. Additionally, we constantly evaluate cases of non-performance throughout the year,” Paytm said. 

Paytm has also decided to lay off 500 to 700 employees based on non-performance in 2021. 

Expansion plans include insurance and wealth

Paytm is looking forward to expanding its operation across insurance and wealth to stay aligned with its present business model. According to GlobalData, India’s insurance market size in 2022 was more than Rs 7.9 trillion and Paytm is planning to capture this market with its existing local distribution model. 

Paytm spokesperson said, “With a dominant position in the payments platform and a proven profitable business model, we will continue to innovate for India. In this, Insurance and Wealth will be a logical expansion of our platform, in continuation of our focus on the existing businesses. Having shown the strength of our distribution-based business model in loan distribution, we are expanding the same to focus on new businesses to drive scale."

Paytm also said that it will be expanding its workforce by more than 15,000 employees in the coming year. 

One97 Communications, the parent company of Paytm, reported a consolidated revenue of Rs 2,519 crore, a strong rise against the Rs 1,914 crore in revenue recorded last year. This surge was driven by the company’s improvement in payment processing margins and growth in its loan disbursement.

Its loss narrowed to Rs 292 crore as against loss of Rs 571.5 crore in the year ago period in the same period last year.