RBI-hit Paytm likely to cut workforce as part of annual performance review

Vijay Shekhar Sharma-led Paytm's parent company, One 97 Communications, is reportedly set to reduce its workforce across various departments as part of its annual performance review. 

The development comes in the wake of scrutiny from the Reserve Bank of India (RBI) over lapses in due diligence by Paytm's payment banks. Although the exact number of employees affected remains undisclosed, A Moneycontrol report suggested that some departments could see reductions of up to 20%.

What did Paytm say?

A Paytm spokesperson said that the company is undergoing its routine annual appraisal cycle, which may result in job adjustments based on performance evaluations. The company emphasized that this process is distinct from layoffs, indicating a focus on performance rather than workforce reduction. 

The spokesperson also highlighted the company's shift towards AI-powered automation, which may redefine roles and tasks to align with growth and efficiency goals.

Employee concerns 

Employees have expressed concerns over the restructuring, with reports of staff being placed on Performance Improvement Plans (PIP) that could lead to termination without severance packages.

Amidst these uncertainties, the job market has seen an influx of over 6,000 talents from Paytm. Furthermore, Paytm's shares have seen a decline, especially with the looming deadline for Paytm Payments Bank services and the NHAI's advisory to FASTag users to switch to other banks.

Company's assurance amid regulatory challenges

Despite the layoffs and regulatory challenges, Paytm founder Vijay Shekhar Sharma assured employees of their job security during a town hall in February. The assurance comes as the company navigates through internal restructuring and regulatory hurdles.

The company has also refuted claims of conducting layoffs, stating that any role changes are based on performance evaluations. However, they acknowledged that layoffs are occurring within Paytm Payments Bank, emphasizing again that the ongoing appraisal cycle is a routine process aimed at assessing performance and role suitability, not strictly layoffs.