 "Paytm hands over 1,000 pink slips; staff from lending business affected")
Fintech major Paytm has laid off over 1,000 employees across departments to save costs, according to a report by The Economic Times (ET).
Employees have been made redundant over the past few months, affecting 10 per cent of the company's total workforce, according to the ET report.
The company laid off over 20,000 and 4,000 employees in 2022 and 2021, respectively. The recent development is likely to have affected Paytm's lending business.
The decision to dismiss these employees comes weeks after the fintech company announced it would reduce the disbursement of small-ticket-size loans, specifically those below Rs 50,000, following the Reserve Bank of India's tightening norms for unsecured personal loans.
The Noida-based financial technology firm's decision to slow down on postpaid loans follows the central bank's recent increase in risk weighting for unsecured personal loans from 100 per cent to 125 per cent.
The company may anticipate faster, early delinquencies for individuals taking a personal loan for the first time. Moreover, credit availability for shorter tenures, such as three and six months, was experiencing higher leverage and reduced collection efficiency, as reported by Business Standard in October.
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The fintech major will now shift its focus to disbursing higher-ticket personal and merchant loans to lower-risk and highly creditworthy customers in collaboration with large banks and non-banking financial companies.
Job cuts at Paytm follow a string of layoffs in the Indian startup ecosystem. Companies have been reducing headcounts amid a funding crunch and a focus on profitability.
In March this year, edtech unicorn Unacademy handed pink slips to over 380 employees. Similarly, on-demand delivery platform Dunzo made job cuts impacting over 300 employees this year. Social media unicorn ShareChat laid off 200 employees, around 15 per cent of its workforce, in another round of layoffs this year.