Paytm employees allege unfair layoff practices; fintech denies accusations
Several employees alleged Paytm is pressurising them to voluntarily resign from their jobs as the troubled fintech deals with the aftermath of the Paytm Payments Bank debacle.
Several employees, speaking to YourStory on condition of anonymity, have alleged that the fintech is forcing them to resign—instead of terminating them—in a bid to avoid employment obligations and negative publicity.
They claim that HR personnel, through video chats and in-person meetings, informed them that their services were no longer needed and that they should resign from their jobs. However, the employees alleged that HR was unwilling to put this demand in any form of written communication.
Some employees, suspecting that the HR calls would likely affect their employment, discreetly recorded these video chats. YourStory has seen two such recorded calls in which HR personnel are demanding that the employee (in the call) resign on their own.
Aman (name changed to protect identity), who worked at Paytm’s engineering department for over a year, claims that the HR manager got him on a video call and asked him to resign voluntarily, citing ongoing cost-cutting measures.
The company allegedly told him it would claw back bonuses, or deduct them from the two months of pay during the notice period, and other components of his full and final settlement which he was offered as part of the resignation.
His offer letter mentioned that the company could recover certain bonuses if the employee leaves before completing 18 months at Paytm.
Aman had disputed several clauses and asked for clarification to be sent via email. However, he didn't receive any email communication for days; instead, he received WhatsApp calls from the HR manager asking him to resign and threatening him with termination.
"My offer letter doesn't specify whether my joining and retention bonuses would be clawed back even if I am involuntarily removed from the company, and if I am being terminated then where is the notice?" Aman told YourStory. "I don't trust these people."
Similarly, Sumit (name changed) was allegedly asked to voluntarily resign from his position as an engineering lead at Paytm. He was informed during a call with the HR manager that Paytm was undergoing a retrenchment exercise, which affected his position. Sumit said he initially negotiated for a new role in a different vertical and even agreed to work at a lower pay. However, this option was not available.
Still working at Paytm, Sumit remains unsure about his future with the company and hasn't received any communication from HR in the last month. He is scheduled to meet with the management next week at their offices.
If Sumit resigns, he alleged that his joining bonus will be deducted from his final settlement, and he will only receive Rs 1 lakh of the Rs 4.25 lakh owed to him from his long-term incentive plan.
None of the impacted employees YourStory talked to received any written communication. All terms of resignation were discussed and negotiated over video calls. Some alleged the HR manager called them 5-6 times a day asking them to resign.
The affected employees have also asked Paytm for recordings of these calls, but haven't received them yet.
About 70 employees have formed a Telegram group to discuss the future course of action. Three employees told YourStory they are considering legal options and some claim to have sent legal notices to the company’s management.
Sumit has been collating instances of such cases of forced resignation and claims that at least 200 people across verticals have been affected.
However, Paytm has refuted all claims.
"We strongly deny allegations pertaining to any forced action on employees or unfair treatment. We have rigorously ensured that our HR teams have informed employees about their termination through official channels only. Further, we would also emphasise that all transitions are duly undertaken as per norms laid out in the appointment letter of these employees," Paytm said in a statement.
"To help them adjust and plan their next move, we are honoring full notice periods of these employees while also extending additional support such as outplacement and processing of due bonuses at the time of their full and final settlements," the company added.
In a conversation with YourStory about job cuts, Instahyre's Co-founder Sarbojit Mallick advised employees to carefully read the terms of employment and seek clarifications from HR before taking up any job, as companies can slip in clauses that grant them the right to terminate or fire employees without notice.
"Usually, these kinds of clauses are not directly mentioned in the terms and conditions. They are masked with the help of technical jargon or a legal language that is not easily understood," he said.
Mallick also noted that firing employees over video calls should be avoided.
"If you have to lay off employees due to unavoidable reasons, the least you could do is give them a reason on a 1:1 call and some time to bid farewell to their colleagues. It shouldn't be a one-way communication as it might take a toll on the employees’ mental health," Mallick added.
On June 10, it was reported that Paytm had handed out pink slips in the last quarter of FY24, reducing the company’s sales employee headcount by about 3,500 quarter-on-quarter. The job cuts were mainly attributed to the Reserve Bank of India's ban on services provided by Paytm Payments Bank.
However, on the same day, Paytm, on one of its social media handles, PaytmNewsroom, posted on X: “Reports of new layoffs at Paytm are speculative and misleading; no new developments have occurred. As outlined in our FY24 earnings, we continue to optimize our cost structure.”
In a statement to PTI, the fintech said it is providing outplacement support to employees who resigned as a result of restructuring.
The RBI's regulatory crackdown impacted both the topline and the bottomline of the Vijay Shekhar Sharma-led company.
Paytm’s losses widened to Rs 549.6 crore for the quarter ended on March 31. It suffered an impairment loss of Rs 227 crore on its investment in PPBL, an associate entity in which the company holds a 49% stake. However, the full impact of this can only be seen by Q1 FY25, Paytm parent One97 Communications said in an earnings release.
In the Q4 earnings presentation, Paytm had also hinted at possible job cuts necessitated due to the crisis at the payments bank.
"In recent years, our employee costs have increased due to investments primarily in technology, merchant sales, and financial services. For the coming year, while we continue to invest in the merchant sales team, as well as risk and compliance functions, we expect reductions in other employee costs," the company said.
Edited by Kanishk Singh