Paytm tightens belt with 4,600 layoffs, ₹650 crore cost cut

Paytm has cut more than 10% of its workforce in the current financial year, reducing employee expenses by ₹650 crore as part of an ongoing restructuring to streamline operations and focus on core growth areas.

According to its FY25 annual report, the fintech major reduced its on-roll headcount from 43,960 in FY24 to 39,368 in FY25—a net reduction of 4,600 roles. The company stated that of the remaining employees, 32,614 are in sales functions, underscoring a renewed emphasis on expanding distribution.

Employee costs, excluding stock-based compensation, fell 21% year-on-year to ₹2,473 crore in FY25 from ₹3,124 crore in FY24. This follows a steep 34% increase in FY24 compared to FY23. “This was driven by our continued efforts to create a leaner organisation structure and increasing productivity leveraging technology, while we continue to invest in our sales team,” the company said in the report.

Restructuring in the wake of RBI crackdown

The workforce reduction comes months after the Reserve Bank of India’s March 2024 directive forcing Paytm Payments Bank to halt operations, which severely disrupted the company’s payments and banking verticals. As reported by Reuters and The Economic Times at the time, the RBI cited persistent compliance issues in its decision.

Following the regulatory action, Paytm underwent multiple layoff rounds and faced complaints lodged with the Labour Ministry in June 2024. According to Business Standard, the dispute was settled in July 2024, with the company agreeing to pay employees for their notice period and allow retention of joining bonuses.

Despite the cuts, Paytm’s cost control measures have helped deliver a turnaround. For the quarter ended June 2025 (Q1 FY26), the company posted a profit of ₹123 crore, compared with a loss of ₹840 crore in the same period a year earlier, according to its latest financial disclosures.

ESOP-related expenses were ₹30 crore in Q1, significantly lower than usual due to a delay in stock grants. Paytm expects total ESOP costs for FY26 to be in the ₹250–275 crore range.

In his letter to shareholders, founder and CEO Vijay Shekhar Sharma said: “Now, having crossed the milestone of profitability, I’m proud of our team for their disciplined execution, deep conviction, and relentless innovation. 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.” (Source: Paytm Annual Report FY25)

Shift in ownership: Antfin exits entirely

In parallel with its operational overhaul, Paytm has also seen a major shift in its shareholder base. This week, Chinese firm Antfin—the last remaining Alibaba Group-linked investor—sold its entire 5.84% stake in One 97 Communications (Paytm’s parent company) in a ₹3,800 crore block deal, first reported by CNBC-TV18.

The sale, executed via Goldman Sachs and Citi at a floor price of ₹1,020 per share, removes all Chinese ownership from Paytm. Over the past two years, early investors including Alibaba, SoftBank, and Berkshire Hathaway have exited. As per June 2025 filings, Elevation Capital (formerly SAIF Partners) is the only major pre-IPO investor still on the cap table, with a 15.4% stake.

In a client note, JM Financial commented: “The current block deal removes Antfin from Paytm’s cap table entirely, reducing its holding to zero. This exit aligns with broader regulatory and geopolitical dynamics with a more India-dominated shareholding structure as the company has faced scrutiny in the past over foreign ownership and data localisation concerns.” (Source: JM Financial, August 2025)

The twin developments—a smaller workforce and a shift in investor profile—signal a leaner, domestically anchored Paytm emerging from a turbulent 18 months. While regulatory challenges have forced difficult decisions, the company’s focus on profitability, sales-driven growth, and an India-heavy ownership structure suggests a new strategic direction.

With the fintech sector under increasing compliance scrutiny and capital markets favouring profit visibility over growth-at-all-costs, Paytm’s next test will be sustaining its recent turnaround while keeping pace with rapidly evolving competition in India’s digital payments ecosystem.