In the face of AI technology, Paytm shares swing from pink to red

 In the face of AI technology, Paytm shares swing from pink to red

In the face of AI technology, Paytm shares swing from pink to red

Almost a thousand members of Paytm's engineering, sales, and operations teams were let go after the company used AI to increase productivity.

CEO of Paytm Vijay Shekhar Sharma predicts a significant AI improvement for finance companies in 2024.

After Paytm used AI technology to boost efficiency, the fintech giant lay off over 1,000 personnel from its operations, sales, and engineering team, resulting in a roughly 1% decline in share price on December 26.

A spokesman for the firm claims that Paytm is using AI-powered automation to revolutionize its operations in order to boost productivity, do away with monotonous jobs and duties, and "enhance efficiency in growth and costs, which will result in a slight reduction in workforce in management and marketing."

The loan crew is among those being let off, sources told Moneycontrol. Paytm shares were trading on the National Stock Exchange (NSE) at Rs 638.95, down 0.5 percent as of 9:17 a.m.

"AI has performed better than we anticipated, thus we will be able to save ten to fifteen percent on personnel expenditures. Furthermore, we conduct annual evaluations of non-performance incidents. Our platform includes wealth management and insurance. A Paytm representative told Moneycontrol, "This will be a logical expansion, continuing our focus on existing businesses."

The Paytm representative said, "We are extending it to concentrate on new companies to achieve growth after demonstrating the viability of our delivery-based business model in loan disbursement.

Paytm's loan business is robust, according to an industry source, but over 30% of the company's workforce is comprised of the team they have hired. "They recently stopped offering BNPL services and small-ticket loans. He requested anonymity and told Moneycontrol, "There is pressure to cut costs." Paytm has let go of 500–700 workers earlier in 2021 due to non-performance.

The fintech company recorded consolidated revenue of Rs 2,519 crore for the quarter ended in September 2023, up 32% year over year. This surge in loan disbursements and improved payment processing margins were the main drivers of this increase. Its net loss decreased to Rs 292 crore, a 49% annual decrease. The firm located in Noida incurred ESOP costs of Rs 385 crore during the quarter.

On December 22, Paytm's shares ended the day on the National Stock Exchange half a percent higher, at Rs 641.90. Paytm's stock has increased by around 20% so far this year, outpacing the Nifty 50 benchmark's rise of 17% over the same time frame.