Paytm’s 4,600 Layoffs in 2025: A Costly Cut or Smart Strategy?

Layoffs are happening everywhere, and this time it’s not entirely due to AI. Paytm reportedly fired 4,600 in FY25 and says it's for “sustainable growth and profitability.” About 32,000 employees out of its 39,368 in 2025 work in sales for Paytm, and AI has little to do with layoffs here. The company was facing losses and was frequently in the news due to RBI restrictions on Paytm's Bank and other legal battles. Therefore, cutting down on its costs seemed reasonable for Paytm. In 2025, Paytm is generating better profits and restructuring its team to focus on ‘digital payments’ and the distribution team. Learn the full story.

What Are The Reasons For Layoffs?

Paytm had a total headcount of 43,960 employees in 2024, after layoffs that dropped to 39,368. The company let go of around 4,600 people. The company has been transparent about the cut, and they have done it strategically to save money.

In April–June 2025 (Q1 FY26), Paytm's parent company, One 97 Communications, earned a net profit of ₹123 crore. Hitting those profits was essential for the company after facing a massive loss of ₹840 crore in the same quarter last year. The improvement mainly came from cost cuts. It appears the layoffs worked for Paytm, but it was a "tough call," says CEO Vijay Shekhar Sharma.

He said, “We took some tough calls, pruned and sold businesses, and doubled down on our core of payments, ensuring the preservation and growth of our cash reserves. This focus towards fundamentals has put us on a clear path toward sustainable growth and profitability.”

Paytm Also Cuts Employee Costs

As part of their cost-optimization strategy in FY25, Paytm reportedly reduced 21% of its employee costs, including salaries, hiring, and maintenance expenses. Last year, Paytm's employee expenses totaled ₹3,124 crore, but this year, the numbers came down to just ₹2,473 crore. Additionally, the company spent only ₹30 crore on employee stock options (ESOPs) this quarter. Overall, Paytm saved a good total of ₹651 crore.

According to its employee data, about 32,000 people work in sales and distribution, and AI does not impact that part at all. Paytm is also creating a lean employee model, where it embraces technology and productivity. It states it wants to grow its distribution and stick to what it’s known for, ‘digital payments.’