The crisis-ridden Paytm on Wednesday hinted at potential job cuts and plans to trim non-core assets following its first-ever decline in sales.
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The crisis-ridden Paytm on Wednesday hinted at potential job cuts and plans to trim non-core assets following its first-ever decline in sales.
In a letter to shareholders, CEO Vijay Shekhar Sharma said Paytm will focus on its core businesses and improve cost efficiencies to create a “leaner organization”.
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The CEO said the employee costs of the firm have risen significantly over the years because of their investments in tech and financial services. While investments will continue, the firm will also take steps to cut employee costs, Sharma said, adding that these measures could save up to Rs 400-500 crore annually.
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In addition, the company is undertaking various steps to solidify its governance framework with the appointment of experts as advisors and independent directors, he said.
“I am ensuring that we have greater regulatory engagement and have higher focus on compliance, in letter and in spirit.”
Moreover, Sharma said the company expects near-term financial impact to revenue and profitability following the “disruptions in the last quarter, which includes impact due to pausing of PPBL wallet”.
The move comes after a regulatory probe by the Reserve Bank of India (RBI) into the startup’s financial arm Paytm Payments Bank (PPBL) impacting the company’s operations.
For the quarter ending March, the FInTech giant reported a net loss of Rs 550 crore while its revenue from operations dipped 2.6% to Rs 2,267.10 crore. This was the company’s first drop since its 2021 stock-market debut.
However, in terms of overall performance of the company in FY24, Paytm highlighted that it continued to build on its strong growth momentum across core payments and financial services distribution business with revenue from operations increasing 25% YoY to Rs 9,978 Cr in FY24.
Also, in this fiscal, the company said it marked its first full year of profitability since the IPO, with an EBITDA before ESOP at Rs 559 crore, up Rs 734 crore from last fiscal.
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