The pandemic has proved to be a double edged sword for the fintech industry. While on one hand the acceleration of digitization gives it hope, the economic stress created by the pandemic makes it face its sternest test yet in fiscal 2021. One of the recent fintech companies to get affected by the COVID-19 crisis is Naspers-owned fintech major- PayU.
A recent report in ET has revealed that PayU has undertaken layoffs at PaySense, the digital credit business it acquired in an all-cash deal in January this year. While the company did not specify the number of employees that are being, or have been, laid off, according to sources aware of the matter, an estimated 40-50 employees, across sales and other operational functions, have been asked to leave.
It seems like the layoffs have occurred due to newly identified redundancies amid the pandemic. The spokesperson said, “As we progress to be future ready and find efficiencies in our business and automate, certain roles and functions become redundant.” He further added that wherever possible PayU has absorbed, repurposed or re-skilled roles to retain as many people as possible within a number of functions in the organization.
“We are working hard with those impacted to help them during this transition period,” he added.
The layoffs come about seven months after the Naspers-owned fintech giant, which counts India as its largest market, acquired a majority stake in Mumbai-headquartered PaySense, valuing the latter at about $185 million. At that time PayU had shared it will merge its existing lending business Lazypay with PaySense, to create unified digital platform, and will also infuse $200 million in the latter over the next 24 months, a sum that included an immediate investment of $65 million, thereby taking the deal size to over $300 million, or more than Rs 2,100 crore. How restructuring organization and repurposing roles will help PayU in battling the crisis and maximizing its growth potential is to look forward to.