Massive Layoffs Hit Paytm as India’s Fintech Poster Child Seeks Profit

New Delhi – Paytm’s parent company One97 Communications has laid off over 1,000 employees in one of the largest job cuts by a fintech firm in India, as the once high-flying startup seeks a path to profitability.

The extensive layoffs, representing at least 10% of Paytm’s workforce, span multiple business units including lending, insurance, operations, manufacturing and relationship management, according to sources cited by the Economic Times.

This sweeping restructuring comes on the heels of Paytm pulling the plug on its small-ticket consumer lending program, signaling a broader strategic shift. With more job cuts likely on the horizon, Paytm is consolidating teams and tightening costs after a disappointing IPO last year.

Paytm founder Vijay Shekhar Sharma defended the move at a company town hall, stating Paytm had over-hired during the pandemic and was now rightsizing based on current business needs. But the layoffs still mark a dramatic turnaround for a company once considered India’s most prized startup.

The cutbacks highlight how India’s once freewheeling fintech industry is maturing. As funding has dried up and companies laser focus on profitability, startups like Paytm are making harsh cuts to survive.

Paytm is not alone – data from Longhouse Consulting shows Indian startups have laid off around 28,000 employees so far this year, compared to just 4,080 in 2021. But Paytm’s public stature as a fintech pioneer makes its retrenchment particularly notable.

While a painful period of restructuring, analysts say the layoffs could help Paytm find stability and renew its mission of bringing digital payments to the Indian mainstream. But the startup landscape remains challenging. Only the lean and resilient may survive.