Fintech giant Paytm, which recently slashed several hundred jobs amid its growing reliance on artificial intelligence, will continue adding tech capabilities to its businesses to build a leaner workforce, the company’s chief executive Vijay Shekhar Sharma said in an earnings call.
“Instead of expanding more business functions, we are trying to add capabilities of machines and systems on our platform. So the systems and capabilities will continue to grow which will necessarily create not so much of demand in a linear way of the number of people that we need,” Sharma said.
Amid its decision to scale down small-ticket loans, last month, Paytm sacked hundreds of employees citing the increasing usage of AI-led automation. Sources told Inc42 that the Vijay Shekhar Sharma-led company has been adopting AI wherever possible to drive up efficiency, which resulted in layoffs.
Besides, the company is in the midst of its appraisal cycle and the fired employees also include those who have not been meeting performance standards, the sources added.
Paytm has been focussing on operating efficiency for the last two quarters, said the company’s president and group CFO Madhur Deora.
Meanwhile, it will not be adding more salesforce on ground.
“We have successfully scaled our manpower to enhance business efficiencies moving forward. We realised those business efficiencies in quarter two and three. Our sales and operations teams, among others, were previously involved in manual processes and heavy lifting in business operations. However, with the integration of technology powered by AI, we have achieved significant improvements in efficiency,” Deora added.
He further said that Paytm has added a lot of people in Q2 due to the festive season. The company had seen a moderate expansion in the salesforce and now has a decent penetration. However, it will not see expansion now.
“We will remain much focused and tighter on people costs, especially on ground, which is a very large part of our overall cost,” he added.
The fintech major’s net loss narrowed by 43% to INR 222 Cr in Q3 FY24 from INR 392 Cr during the corresponding period last fiscal.
Paytm’s operating revenue surged 38% to INR 2,850 Cr in the reported quarter from INR 2,062 Cr in Q3 FY23, largely due to a sharp jump in revenue from payment services to merchants.
Paytm’s management said that they expect positive momentum in results to continue in upcoming quarters also, where fintech’s PAT will turn positive soon.
Meanwhile, brokerage firm CLSA has upgraded One 97 Communications Ltd., to a “buy” from its earlier rating of “outperform,” after the company’s quarterly results. The brokerage has also raised its price target on the stock to INR 960 from INR 925.
It also mentioned that Paytm’s core Ebitda of Rs 2.2 bn was ahead of its Rs 1.6 bn estimate. It added that given the scale-back in BNPL, the company is diversifying more, within lending and otherwise.
Mentioning about the company looking at insurance broking as a new revenue stream, it said: “This would be customised business insurance plans for merchants. In addition, it looks to grow its stock broking and MF distribution; however, it is a small revenue pool, unless Paytm can make it big in derivatives trading. Overall, we increase our adjusted Ebitda estimates by 3%.”
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