Paytm Faces Share Decline Amidst AI-Driven Workforce Reductions

In the wake of significant layoffs driven by artificial intelligence (AI) implementation, shares of One97 Communications Limited, the parent company of fintech giant Paytm, experienced a downturn of nearly 2% during early trade on Tuesday. The Noida-based company, which described the layoffs as a 'slight reduction' in its workforce, saw its shares fall by over 1.5% on the National Stock Exchange (NSE) around 11 am.

The decline in One97 shares unfolded as stock markets resumed trading on Tuesday after a three-day hiatus, which included Christmas the previous day.

Despite confirming the layoffs, One97 did not disclose the precise number of employees affected but refuted media reports suggesting that 'more than 1000' jobs had been eliminated.

A spokesperson from the Paytm owner stated, "We will be able to save 10-15% in employee costs as artificial intelligence (AI) has delivered more than we expected it to. Additionally, we constantly evaluate cases of non-performance throughout the year. Insurance and Wealth will be a logical expansion of our platform, in continuation of our focus on the existing businesses."

Founded by Vijay Shekhar Sharma, One97 had previously undergone workforce reductions, letting go of approximately 20,000 employees in 2022 and 4,080 workers in 2021, according to Entrackr. The current layoffs underscore the company's ongoing efforts to optimize operations and leverage AI technologies, signaling a strategic shift in its workforce management.