Just last week, Vijay Shekar Sharma also announced the company is planning to hire around 15,000 salespeople. The post What the Paytm Layoff Saga Tell Us About AI appeared first on Analytics India Magazine.
The layoffs because of AI continue. “That’s 1000 families not having a happy new year,” wrote a person on X talking about the layoffs that happened at Paytm. According to reports, the fintech major and mobile payments pioneer has laid off 1,000 employees, which is around 10% of its total, from its sales, operations, and engineering team, and replaced them with AI.
“We are transforming our operations with AI-powered automation to drive efficiency, eliminating repetitive tasks and roles to drive efficiency across growth and costs, resulting in a slight reduction in our workforce in operations and marketing,” a Paytm spokesperson told. The person further added that this way the company would be able to save 10-15% in employee cost as AI is delivering better than they initially anticipated.
CEO Vijay Shekar Sharma has been urging his employees and engineers to use Microsoft and Google’s AI tools for reducing development time and costs, and that is possibly leading to a lot more layoffs.
Paytm’s employee payment problem
According to sources, most of the layoffs are part of the lending team at Paytm, a segment which has around 30% of the entire workforce. Paytm has also recently shut down small ticket loans and BNPL services to cut costs. Regardless, people say their lending business, Paytm Money, is going very strong. Since most of the work for it is now automated with AI-powered chatbots, the company is now willing to just expand businesses.
“Young customers are headed towards this. So we are saying, okay, let’s just build our trading platform with investor protection and with recommendations, the power of AI and a high transaction success rate,” said Sharma in an interview.
The Billionaire CEO has allegedly over hired a lot of employees to boost up the company’s services and thus increase revenue during the pandemic. But since the $2.5 billion IPO in 2021, the company has fallen roughly 70% because of losses and rivals such as PhonePE in the market.
This is not the first time that the One97 Communications owned Paytm has done a large scale layoff. In 2021, the company let go of around 600 employees based on their performance. This has been constant every year as the company believes it is essential to evaluate performance and cut costs over time.
Just last week, Sharma also announced the company is planning to hire around 15,000 salespeople for boosting its online wealth management services, essentially getting more merchants on its network, in a bid to hit profitability sooner. Laying off people from its customer services and engineering team might just be a move to cut off on the expenses.
Sharma had also said that with more merchants push and AI automated cost savings could help Paytm operate in profit within a year. Though Paytm had claimed it achieved operating profitability in February, that was excluding the cost of employee stock ownership plans.
Concerns around AI
Sharma is taking Paytm all in on AI by announcing several partnerships. He has also launched a $3.6 million fund for investing in AI and electric vehicles.
At the recent GPAI Summit, Sharma said that India should develop its own AI solutions instead of relying on western products. He said that the potential of AI is immense in healthcare, education, and financial services.
It might be possible that the company is building its own tech stack to compete with others coming up in the market such as Ola building Krutrim.
We reached out to Paytm for comments, but they did not respond.
In November, Paytm also announced that it is partnering with Amadeus for bringing AI solutions to its travel platform and optimising travel experience. This is also probably one of the hints that the company was looking to automate most of its customer-facing work. It is interesting to note that Amadeus uses IBM’s Watson platform for its generative AI tools and hybrid cloud.
In 2022, Paytm had started its partnership with AWS for upskilling 2,800 of its employees that included IT architects and developers.
The concerns around AI stealing jobs have been increasing everyday. In a podcast with Lex Fridman, Sam Altman has said, “AI would be able to do anything that you’d be happy with a remote coworker doing just behind a computer, which includes learning how to be a doctor or learning how to be a very competent coder.”
It seems Altman suggests that a ‘median human’, that could be any of us for him, could be soon out of job. Trying to copy Altman and come on top as legendary, Suumit Shah, the founder of Dukaan, recently drew a lot of flak for firing 90% of his workers to replace them with an AI chatbot. He also later called it a “no-brainer” move.
Mark Cuban predicted six years back that a lot of jobs would become obsolete with AI and customer services are definitely taking a hit.
The post What the Paytm Layoff Saga Tell Us About AI appeared first on Analytics India Magazine.