Paytm Hints At Job Cuts, Non-Core Asset Trimming Amid Revenue Decline

New Delhi: Cash-strapped fintech giant Paytm on Wednesday announced potential job cuts and plans to streamline its operations in a bid to return to profitability. The company’s CEO, Vijay Shekhar Sharma, outlined these plans in a letter to shareholders, following Paytm’s first-ever decline in sales.

Sharma attributed the decline to a recent regulatory probe by the Reserve Bank of India (RBI) into Paytm Payments Bank (PPBL), which disrupted operations. The company reported a net loss of Rs 550 crore for the quarter ending March, alongside a 2.6% dip in revenue from operations.

To navigate these challenges, Paytm will focus on its core businesses while shedding non-essential assets. This restructuring aims to create a “leaner organization” and improve cost efficiencies. Employee costs, a significant contributor to the company’s financial burden, will be reduced through measures that could potentially save Rs 400-500 crore annually.

Sharma emphasized Paytm’s commitment to strengthening its governance framework. The company will appoint new advisors and independent directors with relevant expertise. Additionally, Sharma reassured shareholders of the company’s focus on regulatory compliance, stating, “I am ensuring that we have greater regulatory engagement and a higher focus on compliance, in letter and in spirit.”

Despite the recent setbacks, Paytm highlighted its overall performance for FY24. The company achieved a 25% year-on-year increase in revenue from operations, reaching Rs 9,978 crore. Notably, FY24 marked Paytm’s first full year of profitability since its IPO, with an EBITDA before ESOP of Rs 559 crore.