Paytm lays off 4,500 employees in FY25 amid cost-cutting push
What's the story
Paytm's parent company One97 Communications has cut its workforce by 4,500 in FY25. The move has helped the company save around ₹650 crore in employee expenses. According to the company's annual report published today, the average number of employees at Paytm was 44,000 in FY24. This number dropped to 39,400 in FY25, resulting in savings higher than the estimated ₹400-500 crore.
Cost reduction
Employee costs fell by 21% in FY25
Paytm's employee costs (excluding ESOP expense) fell by a whopping 21% to ₹2,473 crore in FY25 from ₹3,124 crore in the previous fiscal year. However, it's worth noting that despite this reduction, the employee expenditure for FY25 is still higher than the ₹2,323 crore spent in FY23. The company attributed these changes to its efforts to streamline operations and improve productivity through technology.
CEO statement
Tough decisions made to ensure sustainable growth, profitability
In a letter to shareholders, Paytm's CEO Vijay Shekhar Sharma said the company has made some tough decisions, including pruning and selling businesses. He said these measures were taken to double down on their core payments business while ensuring the preservation and growth of cash reserves. "This focus toward fundamentals has put us on a clear path toward sustainable growth and profitability," he added.
Profit report
Paytm reports first-ever operational net profit
Paytm recently reported its first-ever operational net profit of ₹123 crore in the June quarter of this fiscal year. The achievement was largely driven by a strong growth in lending and a 19% reduction in expenses. The company's revenue also witnessed a significant jump, rising 28% to ₹1,918 crore while EBITDA turned positive at ₹72 crore.