Paytm Payments Bank To Slash Workforce By 20%

Paytm Payments Bank Limited (PPBL) is reportedly considering a reduction in its workforce by about 20 percent, citing uncertainty surrounding the bank's future, as per sources cited by news agency Reuters.

The decision to trim jobs at the payments bank comes amidst the Reserve Bank of India's (RBI) directive for the bank to halt several key operations by March 15 due to ongoing compliance issues. According to sources quoted in the report, the bank plans to lay off employees across various departments, including operations.

As of December 2023, the bank employed 2,775 individuals.

The RBI's actions against PPBL have rattled investor confidence in digital payments firm Paytm, which holds a 49 percent stake in the bank. Notably, Paytm shares have plummeted by over 50 percent in value since the RBI's intervention.

An employee at the banking unit, identified as the first source, informed the news agency, "Since this regulatory order has coincided with the appraisal season, employees with low ratings have been asked to leave." The individual added, "Employees are frustrated because the management has gone back on their word that nobody will be laid off."

In a purported town hall meeting held internally in February, Paytm CEO Vijay Shekhar Sharma reportedly assured bank employees of no job cuts, according to the second source, also an employee in the banking unit.

However, a Paytm spokesperson refuted the possibility of job cuts due to the RBI's action against the payments bank.

"There are no layoffs here. The annual appraisal cycle is underway at the company which may lead to adjustments based on performance evaluations and role suitability," the spokesperson clarified.

"It's crucial to understand that this process is distinct from layoffs," the spokesperson emphasized.

Following the March 15 deadline, customers will retain access to their deposits and wallets held by Paytm Payments Bank, but the bank will not accept new deposits. The bank's future role remains uncertain after the cessation of its operations.

Despite the hurdles, Paytm anticipates receiving a license from the National Payments Corporation of India (NPCI) to enable its customers to continue using the Paytm app for payments via the unified payment interface (UPI).

However, there has been no update from Paytm regarding the future roles of banking staff post the operational halt. The company reportedly absorbed approximately 100 employees from the banking unit.