The biggest news of the day is coming from the fintech giant Paytm as the organization decided to remove 1000 of its employees after the implementation of AI Automation Tech. The major layoffs have been made by the sales and engineering teams to improve efficiency.
Paytm’s spokesperson told to MoneyControl “To improve efficiency and to eliminate the repetitive tasks, they are trying to transform their operations with AI-powered automation.” Further, they said, “This will help in the roles to drive efficiency across growth and costs, and reduce the workforce in operation and marketing”.
They also stated that they will be able to save 10-15% in employee costs as AI has delivered more than their expectations. The Paytm spokesperson also stated that “Insurance and wealth will be a logical expansion of the platform, in continuation of their focus on the existing businesses. “
Having shown the strength of our distribution-based business model in loan distribution, they are expanding the same to focus on new businesses to drive scale. According to the reports given by the Economics Times in 2021, they have stated it at that time that Paytm may lays off 500-700 employees based on their performance.
The same thing is happening this time. As they are rolling out the implementation of AI, they need some solid things to remove the employees. So they are giving the reason for poor performance to the employee in these categories. Mass layoffs have been made from the lending team.
Talking with Moneycontrol, a Paytm spokesperson has given the reason that during the hiring period, they had hired a mass number of employees which was almost more than 30% of the requirement. Although their lending business is going very strong.
But because the number of employees is more lead to increase in employees costs. One more thing, Paytm has shut down the small-ticket loans and BNPL services. There is pressure of cost-cutting, which leads to the mass removal of employees.
On December 7th Paytm announced to slow down its small-ticket postpaid loans as they are looking to expand their high-ticket personal loans and merchant loans. The same happened with brokerages as well as the decision did not go well, causing them to cut their revenue estimates for the company.
During an analyst meeting, the company stated that their postpaid loans may fall to 50% but that will not affect their profit margins and revenue. According to a report, postpaid has the lowest take rates among all the lending schemes of Paytm, that’s why it is not going to affect the company’s revenue.
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On 20th October, one97 Communications, the parent company of the fintech giant Paytm, reported a total revenue of Rs. 2519 crore which was 32 percent more than the second quarter which ended on September 23. This revenue gets improved on account of payment margins and growth in its loan distribution.
The company’s losses were recorded at Rs292 crore in the 2nd quarter of 2023 which was Rs 571 crore during the 2nd quarter of 2022. This was the statements and reports released after the big layoffs made by Paytm.
Keep in mind, that this type of news is going to be common as the company has started implementing Artificial Intelligence automation. The ones who believe that AI is not gonna replace them then it is going to be the biggest mistake of their life. You should start learning new skills with the help of AI.
We all need to change with AI and have to learn how to use Artificial Intelligence. If we are learning to live with AI, we are going to grow a lot. If you want to learn new skills you can check out the skills page of our website.