The leading fintech company, Paytm, has reportedly fired over 1,000 employees across various departments in recent months, The Economic Times reported.

The layoff initiative is attributed to the integration of Artificial Intelligence (AI) within the company, leading to significant changes in its operational structure, the report added.

In response to queries from ET, a Paytm spokesperson stated that the company aims to reduce staff expenses by 10 to 15 percent. However, the company has not officially commented on the termination of its employees.

Speculations indicate that the Reserve Bank of India's ban on unsecured loans may have affected Paytm's lending department, specifically Paytm Postpaid, resulting in the termination of employees.

The company fired more than 20,000 employees from its different departments in 2022 and around 4080 in 2021, according to various media reports.

The spokesperson indicated that the job cuts primarily targeted positions that could be automated through AI processes, the report added.

Notably, the company's founder, Vijay Shekhar Sharma, recently launched the Category II Alternate Investment Fund (AIF) VSS Investments Fund, with a focus on investing in sectors related to Artificial Intelligence and Electric Vehicles.

A recent report from Long House Consulting reveals that new economy companies have collectively laid off over 28,000 employees in the first three quarters of the year. Regarding Paytm, the majority of layoffs reportedly occurred in its loan disbursement section.

The company, according to the report, is now looking to expand its operations in the fields of wealth management and insurance broking. This strategic shift aligns with the evolving landscape of fintech and aims to diversify Paytm's business portfolio.

The trend of layoffs in the tech sector seems to be prevalent, with other companies such as ShareChat, Udaan, and Third Wave Coffee also reported to have let go of significant numbers of employees despite recent investments and financial recoveries. The reasons behind these layoffs vary, with factors such as market dynamics and strategic business decisions playing a role in reshaping the workforce across the industry.

In the second quarter of the ongoing fiscal year (Q2 FY24), the fintech's reported 32 per cent growth in consolidated revenue from operations, reaching Rs 2,519 crore. Despite this positive revenue growth, the company recorded a consolidated net loss of Rs 292 crore for the same quarter. It's noteworthy that Paytm had previously reported operating profitability in early 2023 and is currently striving to attain profitability at the EBITDA level, as per Entrackr.