Fintech firm One97 Communications, which owns the Paytm brand, announced its results for the fourth quarter on May 22. Founder Vijay Shekhar Sharma’s statement to shareholders hints at looming job cuts.

“We are optimizing our cost structure, leveraging AI capabilities, and focusing on our core business to achieve significant cost efficiencies. This includes creating a leaner organization structure and pruning non-core businesses,” Sharma told shareholders.

Paytm’s remarks follow the company’s widening loss in the fourth quarter of FY 2023-24, which increased to ₹550 crore after the Reserve Bank of India banned transactions related to its payments bank. This compares to a loss of ₹168.4 crore during the year-ago quarter.

Sharma noted that employee costs have risen due to investments in technology, merchant sales, and financial services. However, in the coming year, while investments in the merchant sales team and risk and compliance functions will continue, reductions in other employee costs are expected. The firm anticipates annualized people cost savings of ₹400-500 crore.

He explained that all recent changes align with pre-approved succession plans discussed with the board in previous financial years. Additionally, the firm will continue to reward high-performing talent by promoting them to leadership roles and welcoming new senior executives to drive the next wave of growth.

In response to CNBC-TV18, Paytm stated, “As mentioned in our previous guidance, we continue to look at the use of AI-led automation. However, we are proud of the talent density at Paytm and will look to promote them to leadership roles. To drive growth, we will welcome senior executives on our mission.”

One97 Communications Ltd expects revenue for the June quarter to range between ₹1,500 crore and ₹1,600 crore, a drop of 30-35% compared to the year-ago quarter’s revenue of ₹2,342 crore. However, the company is confident of seeing meaningful improvement starting from the September quarter, based on restarting paused products and achieving steady growth in its operating metrics.

In the April to March 2024 quarter, revenue declined 2.9% from last year to ₹2,267.1 crore. The company attributed the revenue drop to temporary disruptions in UPI transactions and a permanent embargo on Paytm Payments Bank following RBI action.