The major fintech company Paytm has downsized its workforce significantly while opting to scale back small-ticket loans, attributing this decision to the increasing reliance on artificial intelligence-powered automation.
According to sources who spoke with Inc42, the Vijay Shekhar Sharma-led business has been implementing AI wherever it can to increase productivity, which has led to layoffs. Moreover, as per sources, the company is presently undergoing its performance appraisal cycle, and included among the terminated employees are those who did not meet the established performance standards.
(Image Source: https://inc42.com/)
Although Inc42 couldn’t ascertain the number of employees impacted by the layoffs, an ET report suggested that around 1,000 workers were released.
The company acknowledged the layoffs in a statement but refrained from specifying the exact number of affected employees. Our focus remains on modernizing operations through AI-driven automation to enhance efficiency across growth and expenditure. Consequently, we are reducing personnel in our operations and marketing departments. AI has exceeded our expectations; thus, we can save ten to fifteen percent on personnel costs. Furthermore, we continuously assess instances of non-performance all year long,” the business said in a statement to Inc42.
In the upcoming year, there might be a 15,000 rise in staff in the core payments sector.
Our profitable business strategy and dominating position in the payment industry will enable us to innovate in the Indian market. In keeping with our focus on the current businesses, insurance and wealth management will be a logical extension of our platform, the company stated.
It is relevant to note that Sharma stated last week that Paytm hopes to turn a profit within a year of starting operations by strengthening its online wealth management services, adding more merchants to its network, and saving money through AI automation.
This development coincides with the fintech company’s decision to reduce its small-ticket loan business, which consists primarily of its postpaid loan business, to less than INR 50K, in response to the Reserve Bank of India’s (RBI) tightening of lending regulations.
In the September quarter, 72–75% of Paytm’s total disbursements in the BNPL category were postpaid loans with less than INR 50K.
The decision to reduce the lending business is anticipated to provide a problem for Paytm at a time when the company is facing increased competition from Jio Financial Services’ full-fledged fintech entry and its fiercest rival PhonePe’s efforts to broaden its product offerings. Numerous brokerages have also cut their projections for the massive fintech company.
Paytm’s choice to lay off hundreds of employees, citing AI-driven automation, demonstrates the swift transformation of the corporate terrain by technology. This move emphasizes the growing fusion of artificial intelligence (AI) and automation to streamline company operations, leading to reorganization and workforce adaptations.
It serves as a crucial indicator of shifting employment dynamics, where innovations such as AI profoundly influence the restructuring and functioning of businesses. The focus on automation’s ability to enhance tasks and workflows may redefine job roles and the skill sets needed across various industries. The situation at Paytm reflects a smaller-scale version of the broader trend of technological advancements disrupting job markets, emphasizing the need for adaptation and acquiring new skills to match the evolving requirements of a digitally-centered economy.
(Information Source: https://inc42.com/)
Hi, I am Subhranil Ghosh. I enjoy expressing my feelings and thoughts through writing, particularly on trending topics and startup-related articles. My passion for these subjects allows me to connect with others and share valuable insights.
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