Paytm News Update:
The Regional Labour Commissioner of Bengaluru has summoned One97 Communication, the parent firm of Paytm, in response to allegations of forced employee terminations.
This action follows a series of complaints filed with the Ministry of Labour and Employment, accusing the company of unlawful terminations and withholding pay, as reported by Moneycontrol in June.
The notice, issued by the Regional Labour Commissioner (Central) under the Office of the Deputy Chief Labour Commissioner (Central), Ministry of Labour and Employment, requests representatives from Paytm management and the complainants to appear with all relevant records.
A Paytm spokesperson commented, “We value the contributions of all our employees and remain humbled by their dedication. The decision to transition some employees has been a difficult one for all parties involved and was made only after careful consideration of all available options.”
The spokesperson added that Paytm strives to support transitioning employees fairly and transparently. “We are here to address and resolve any issues expressed by those affected and are actively listening to their feedback. Rest assured, we will continue collaborating with all stakeholders to ensure the best for our employees,” the spokesperson said.
The issue stems from complaints by employees who claimed they were forced to “voluntarily resign” without prior notice or severance packages. These complaints were filed through the ministry’s Samadhan portal and other public grievance channels, accompanied by relevant emails and documents, seeking job reinstatement.
The complaints follow the RBI’s decision to ban Paytm Payments Bank, which has led the Noida-headquartered firm to undertake a massive restructuring, including employee rationalization.
In a letter to shareholders on May 22, founder and CEO Vijay Shekhar Sharma stated that the company would focus on its core businesses and improve cost efficiencies to create a leaner organization, suggesting possible layoffs. Sharma noted that the firm’s employee costs had risen due to investments in tech and financial services.
While continuing investments in the merchant sales team and risk and compliance functions, the company plans to reduce employee costs, potentially saving up to Rs 400-500 crore annually. Paytm claims to have provided outplacement support to employees who resigned as part of the restructuring efforts.
