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Paytm parent One97 Communications Ltd. shares fell 2% in the early morning trade today after reports of the fintech major laying off a significant number of employees across departments after deploying artificial intelligence-backed measures to drive efficiency.
“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,” a Paytm spokesperson says.
The spokesperson, however, denies mentioning the exact number of layoffs, saying many news platforms have mentioned a number that is “factually not right”.
The company will save 10-15% in employee costs with these AI-backed measures, says Paytm, while hinting at more layoffs in the coming periods. “We constantly evaluate cases of non-performance throughout the year.”
Also Read: Paytm shares nosedive 20% on plans to scale down small-ticket postpaid loans
In the coming year, Paytm says it plans to increase manpower by 15,000. “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, continuing our focus on the existing businesses,” the spokesperson adds.
The current development at Paytm comes days after its Chief Executive Officer (CEO) Vijay Shekhar Sharma, as part of his to-do list for the New Year, sought suggestions from his followers on microblogging platform X.
“Making my todo list for 2024. 📋 What will you like to change/upgrade in Paytm app?📲 We have changed new Paytm app’s Home Screen. Paytm Payments Bank and Other group entities’ offerings are clearly separated now. Makes it cleaner view. ✅ Expanding AI led customer care. Personalisation using AI on way,” he had shared on X.
Notably, Paytm had also laid off a significant number of employees across departments in the years 2021 and 2022 as well.
Also Read: Warren Buffett’s Berkshire Hathaway exits Paytm; stock drops 1%
Earlier this month, Paytm said it planned to slow down its small-ticket postpaid loans while focussing on high-ticket personal as well as merchant loans. The company will expand its business to offer higher ticket personal and merchant loans while reducing small-ticket postpaid loans of less than ₹50,000. The decision came after the RBI’s recent move to increase risk weights on unsecured lending.
The shares opened a gap up at ₹643.05 and surged to an intra-day high of ₹644.20. However, the shares soon dropped to an intra-day low of ₹630.30, taking Paytm’s m-cap to ₹40,174.76 crore. At the current share price of ₹632.85, the Paytm stock is trading 36.6% down from a one-year high of ₹998.30 touched on October 20, 2023.
The financial technology company shares have surged around 25.39% in the past year, while they saw an 18.85% surge in the year-to-date period. In the six-month, and one-month periods, the shares have fallen 24.53% and 28.82%, respectively.
In contrast, the broader Sensex is 0.39% up at 71,386.98 today, while Nifty is 0.48% up at 21,450.55.
Brokerage firm Jefferies has cut its FY24-26 revenue estimates for Paytm by 3-10% and adjusted EBITDA estimates by 12-15%. The agency lowered its price target for the stock by over 19% to ₹1,050 while retaining its ‘buy’ call.
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Also Read: Paytm Q2 loss narrows to ₹290 cr; revenue rises 32%
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