One 97 Communications, parent of fintech firm Paytm, on Monday confirmed a “slight reduction” in its workforce as part of cost-cutting measures, without specifying the number of jobs.

A company spokesperson, however, denied recent media reports that have suggested the non-bank lender could cut more than 1,000 roles.

“We will be able to save 10-15 per cent in employee costs as Artificial Intelligence (AI) has delivered more than we expected it to,” the spokesperson told Reuters.

Paytm is overhauling its operations in an attempt to achieve its first net profit since listing in November 2021.

During its fiscal year to end-March 2023, Paytm had an average of 32,798 directly employed staff and 1,589 contracted employees worldwide, across its various units, its annual report showed.

Fewer high-risk loans

Paytm will issue fewer sub-Rs 50,000 (about $600) personal loans, the digital payments firm said, weeks after the central bank tightened rules on consumer lending after a surge in demand.

The non-bank lender said it will expand its portfolio of higher-ticket personal and commercial loans to lower-risk and high-credit-worthy customers, expecting “good demand” for loans of more than Rs 50,000.

The RBI recently raised the amount of capital that banks and non-bank lenders need to set aside to cover potential defaults when giving out personal loans.

The RBI tightened its rules after a surge in such small-ticket loans, particularly of those less than Rs 50,000, and an increase in delinquencies.

Paytm is getting “ultra conservative” in this segment, Bhavesh Gupta, the company’s president and chief operating officer, said on a call with analysts.

“On the back of recent macro development and regulatory guidance, in consultation with our lending partners, we have decided to reduce distribution of loans less than Rs 50,000,” Gupta said.

This, he estimated, will lead to a near 40-50 per cent drop in the volume of loans Paytm issues through its post-paid product, but will have a minimal impact on revenue growth.

Paytm’s post-paid loans accounted for about 56 per cent of total loans in the July-September quarter, per company data. The sub-Rs 50,000 loans, in particular, account for about 38 per cent of Paytm’s total loans.

Reuters