Paytm layoffs: Over 1000 employees fired; company cites AI benefits as the big reason

Paytm layoffs: Paytm’s parent company, One97 Communication, has fired more than 1000 employees. The company says AI advancement has led to optimizing its workforce and it seeks to eliminate repetitive tasks.

Paytm layoff: The tech firm has fired more than 1000 employees across various departments as a cost-cutting strategy. (REUTERS)

Paytm layoffs: Just a day after reports suggested Google may fire as many as 30000 employees due to AI rendering those jobs useless, Paytm's parent company One97 Communication has given the pink slip to more than 1000 employees across different departments as a cost-cutting measure. As per reports, the Paytm layoffs took place over the last few months. One of the major reasons that enabled the company to restructure its workforce was the advancement in artificial intelligence (AI), which led to some positions being regarded as surplus to the needs of the company.

According to a report by the Economic Times, which was the first to highlight the development, the move will reduce the overall workforce of Paytm by 10 percent. The cost-cutting strategy was taken after the company left the buy-now-pay-later (BNPL) and small-ticket lending space due to regulatory tightening on unsecured loans by RBI. The bulk of the job losses are also expected in the same division which grew significantly over the last year.

Paytm fires over 1000 employees

Paytm is building an India-scale AI system that can power various financial institutions in preventing instances of risks and fraud. The company is also taking a proactive approach to create a framework to protect itself from the attacks that can be generated as a result of the advancement of AI as well.

"We are transforming our operations with AI-powered automation to drive efficiency, eliminating repetitive tasks and roles to drive efficiency across growth and costs, resulting in a slight reduction in our workforce in operations and marketing. We will be able to save 10-15% in employee costs as AI has delivered more than we expected it to. Additionally, we constantly evaluate cases of non-performance throughout the year," A Paytm spokesperson said, as quoted by ANI.

“We will be able to save 10-15 percent in employee costs as AI has delivered more than we expected it to. Additionally, we constantly evaluate cases of non-performance throughout the year,” the spokesperson added.