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New Delhi: India’s digital payment app, Paytm has announced potential job cuts as the company plans to streamline operations by trimming non-core assets. The decision follows Paytm’s first-ever decline in sales reported on May 22.
Fintech major Paytm’s net loss has more than tripled year-on-year and reached Rs 550.5 crore in the March quarter (Q4) of the financial year 2023-24 (FY24) compared to Rs 167.5 crore in the same period last year. Revenue from operations decreased by 2.9 percent year-on-year, falling to Rs 2,267.10 crore in Q4FY24 compared to Rs 2,334 crore in the same period last year. (Also Read: India Exports Over 45,000 Tonnes Of Onions After Ban Lifted)
Paytm CEO Vijay Shekhar Sharma informed shareholders that the company anticipates a short-term financial impact on revenue and profitability due to the disruptions experienced in Q4. In a letter to shareholders he mentioned, “We expect near-term financial impact to our revenue and profitability, due to disruptions faced in our business in Q4. (Also Read: Buddha Purnima Holiday: Banks To Remain Closed In THESE Cities & States On May 23)
He further added “This includes steady state impact due to pausing of PPBL wallet. We had also paused a few other payments and loan products to our customers during the last quarter, and I am happy to share that many such products have been restarted or in the process of starting soon.”
Sharma mentioned that employee costs have risen significantly over the period of years due to investments in technology and financial services. He mentioned that while investments will continue, the company will take steps to reduce employee costs. These measures could save up to Rs 400-500 crore annually.
Sharma also highlighted that the company is using artificial intelligence to improve customer care which is expected to open new sources of revenue and lead to cost savings. The company is improving governance by appointing experts and reviewing processes. They are also increasing regulatory engagement and focusing on compliance.
“We are also taking various steps to strengthen the governance framework across our group entities (especially regulated entities) by appointing subject matter experts as advisors or independent directors, reviewing various processes etc. I am ensuring that we have greater regulatory engagement and have higher focus on compliance, in letter and in spirit.” Sharma wrote in a letter to shareholders.”
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