Paytm layoffs : Paytm is under the spotlight again after several of its former employees have alleged the fintech major over unlawful termination of employment without severance pay.
According to a report by Moneycontrol, ex-employees have filed complaints with the Ministry of Labour and Employment demanding a fair and formal termination process for the same.
They said Paytm did not formally communicate the restructuring or job loss and warned employees against recording HR meetings.
In the letter, Sharma stated that the employee costs of the firm have risen over the years because of their investments in tech and financial services.
Also Read: Zomato-Paytm deal: Brokerages retain ‘buy’ calls on Zomato, see up to 51% upsideThese measures could save ₹400-500 crore annually for Paytm, according to Sharma.
Paytm layoffs : Paytm is under the spotlight again after several of its former employees have alleged the fintech major over unlawful termination of employment without severance pay. According to a report by Moneycontrol, ex-employees have filed complaints with the Ministry of Labour and Employment demanding a fair and formal termination process for the same.
Reports said that employees have complained against the informal process. They said Paytm did not formally communicate the restructuring or job loss and warned employees against recording HR meetings. “The calls with HR are labelled as 'connect' or 'discussion'. There is no formal documentation of any kind," said one of the employees who was terminated from the fintech.
Also Read: Paytm job cuts: Employees allege forced resignations, no severance pay, informal processes & more, says report
Many former and current employees of Paytm reportedly complained that they were forced to "voluntarily resign", were not paid severance, and asked to return their retention and joining bonuses. According to complaints dated between June 1-12, employees have filed for reinstatement of their employment alleging unfair and unethical termination by the management, as per Moneycontrol.
Livemint could not independently verify the report.
RBI crackdown on Paytm arm
After the Reserve Bank of India (RBI) decided to wind down the operations of Paytm's financial arm and wallets business, Paytm Payments Bank, the fintech has been undertaking a massive restructuring process, including employee rationalisation and reduction of costs.
In a letter to shareholders on May 22, Paytm founder and CEO Vijay Shekhar Sharma had said the firm will focus on its core businesses and improve cost efficiencies to create a leaner organisation, hinting at the possibility of layoffs.
In the letter, Sharma stated that the employee costs of the firm have risen over the years because of their investments in tech and financial services. While investments in merchant sales team and risk and compliance functions will continue, the firm will take steps to cut employee costs, according to the CEO.
Also Read: Zomato-Paytm deal: Brokerages retain ‘buy’ calls on Zomato, see up to 51% upside
These measures could save ₹400-500 crore annually for Paytm, according to Sharma. According to earlier reports, some employees also alleged that the company is demanding their joining and retention bonuses be returned, but this was not mentioned in their offer letters. The company has cited the offer or appointment letter (after joining) as the basis for asking the return payment, but employees claim they never received or signed the appointment letters.
However, Paytm had previously said in a statement, ‘’"One97 Communications Limited (OCL) is providing outplacement support to employees who have resigned as a part of the restructuring efforts by the company.''
The RBI had barred Paytm Payments Bank Limited from accepting deposits, credit transactions, or top-ups in any customer accounts, wallets, and FASTags starting from March 15, citing non-compliance issues and supervisory concerns.
Congress' working professionals wing extends support
The All India Professionals' Congress (AIPC), a wing of the Indian National Congress (INC) focused on working professionals and entrepreneurs, has extended its support to the former Paytm employees who have been laid off.
AIPC took to microblogging platform ‘X’ and wrote, ‘’Newsreports say Paytm has sacked professionals in violation of their contractual obligations. Are you an Ex-Paytm Professional? Were you forced to resign without compensation? All India Professionals' Congress will fight for your cause.''
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