Not A Merry Christmas! Paytm Replaces 1,000 People With AI


2023/12/25 16:49:25 IST

Paytm's Workforce Restructuring

    Paytms recent move of laying off over 1,000 employees and replacing them with AI to enhance operational efficiency has left people shocked.

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AI Implementation Impact

    Paytm has adopted AI technology across its operations, sales, and engineering teams, resulting in the streamlining of tasks and roles.

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Efficiency-Driven Transformation

    The companys rationale for the layoffs, focusing on AI-powered automation to achieve efficiency gains and cost reductions is also serving as a major warning for employees across the world.

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Employee Cost Savings

    Paytm is expecting to save 10-15 per cent in employee costs through AI implementation, exceeding initial projections.

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Business Expansion

    Paytms strategic move towards expanding its platform to include insurance, wealth, building on its existing distribution-based business model.

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Layoffs in 2021

    Paytm back in 2021 also decided to lay off 500 to 700 employees based on performance issues.

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Challenges In Lending Business

    The challenges faced by Paytm in its lending business, particularly the pressure to cost cuttings, has resulted in recent closures of small-ticket loans and BNPL services.

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Strategic Shift In Loan Services

    Paytms decision is aimed at slowing down small-ticket postpaid loans while focusing on expanding high-ticket personal loans and merchant loans. They aim at impacting brokerages revenue estimates.

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Financial Performance Snapshot

    Review Paytms consolidated revenue of Rs 2,519 crore for Q2 of FY24, reflecting a 32% increase, and its reported losses at Rs 292 crore, a notable improvement from the previous year.

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10ESOP Expenses, Future Outlook

    Paytm has ESOP expenses of Rs 385 crore for Q2 and the companys outlook. This emphasises minimal revenue impact despite adjustments in its postpaid loan offerings.

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