Fintech Firm One97 Communications Announces Layoffs Amid RBI Ban on Paytm Payments Bank

In a recent development, One97 Communications, the owner of the Paytm brand, has initiated layoffs affecting an undisclosed number of employees. The company is offering outplacement support to ensure a smooth transition for those impacted, according to an official statement.

The layoffs follow a significant reduction in Paytm's sales employee headcount, which dropped by approximately 3,500 to 36,521 personnel in the March 2024 quarter. This decrease is attributed to the Reserve Bank of India's (RBI) ban on Paytm Payments Bank services.

"One97 Communications Limited (OCL) is providing outplacement support to employees who have resigned as part of the restructuring efforts by the company. The human resource teams are collaborating with over 30 companies that are currently hiring, providing assistance to employees who have opted to share their information, facilitating their immediate outplacement," the company stated on Monday.

In addition to the restructuring, Paytm is also ensuring that bonuses due to employees are disbursed, maintaining fairness and transparency in the process.

The RBI's ban, effective from March 15, prevents Paytm Payments Bank Limited (PPBL) from accepting deposits, credit transactions, or top-ups in any customer accounts, wallets, and FASTags, in consideration of customer interests, including merchants.

The financial impact of the RBI's decision has been substantial. Paytm reported a widening loss of Rs 550 crore for the January-March 2024 period, compared to a loss of Rs 167.5 crore in the same period the previous year.

As part of its FY24 earnings release, One97 Communications highlighted its strategy to prune non-core business lines and maintain a leaner organizational structure through AI-led interventions. The company is actively working towards driving profitability, aligning with its guidance.

The recent restructuring and strategic adjustments underscore Paytm's commitment to navigating regulatory challenges and focusing on sustainable growth and profitability in the fintech sector.