Amid the ongoing layoffs at Paytm, several employees of the fintech major have reportedly knocked on the doors of the Ministry of Labour and Employment, alleging “unlawful termination” without compensation.
As per Moneycontrol, multiple Paytm employees have filed complaints on the ministry’s Samadhan portal.
Citing grievances dated June 1 to June 12, the report claims that the aggrieved employees have sought the reinstatement of their employment, alleging unfair and unethical termination by the Paytm management.
The online complaints also include supporting documents such as emails and other other papers. “We are awaiting a response from the ministry and hope the case will be taken up by them. If not satisfactory, will take the court route,” a complainant reportedly said.
Another laid-off employee also reportedly added, “There is a clause in the offer letter which mentions that in case any dispute arises between the employer and the employee, it has to be resolved via a third-party arbitration committee and be settled amicably. We cannot take them (Paytm) to the courts directly and will have (to) first settle this via the committee”.
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Meanwhile, All India Professionals’ Congress (AIPC) has also extended its support to the impacted employees of Paytm. In a post on X, the Congress wing sought details from the impacted employees allegedly “forced to resign without compensation”.
“News reports say Paytm has sacked professionals in violation of their contractual obligations. Are you an Ex-Paytm Professional? Were you forced to resign without compensation? All India Professionals’ Congress will fight for your cause,” AIPC said.
This comes just a week after Inc42 reported that the fintech startup was forcing employees to resign voluntarily or face disciplinary action. At the time, many aggrieved employees also claimed that Paytm was looking to claw back the joining and retention bonuses of the employees.
The development comes at a time when Paytm is grappling with fires on multiple fronts. It started after the Reserve Bank of India (RBI) announced curbs on Paytm Payments Bank in January, citing “material supervisory concerns”. The central bank barred the payments bank from undertaking any deposits or processing any UPI transactions.
On account of this, the fintech major’s revenue from operations declined 2.9% year-on-year (YoY) to INR 2,267.10 Cr in the March quarter (Q4) of the financial year 2023-24 (FY24). Meanwhile, net loss soared 3X YoY to INR 550.5 Cr during the same period.
To rein in the losses, the company has been aggressively looking to cut costs and streamline operations. As a result, it has undertaken mass layoffs. In a letter to shareholders on May 22, founder and CEO Vijay Shekhar Sharma said that the fintech major would take steps to cut employee costs, which will help the company save up to INR 400 Cr to INR 500 Cr annually.
Meanwhile, top-level exits continue at Paytm. Earlier this week, Neeraj Arora resigned as the non-executive independent director of the fintech major and was replaced by former SEBI (Securities and Exchange Board of India) board member Rajeev Krishnamuralilal Agarwal.
As a result, the company’s stock has been under selling pressure since the RBI announced its curbs. The fintech major’s stock is down 35.3% year-to-date (YTD). Paytm shares closed 0.09% lower at INR 411.30 on the BSE on Friday (June 21).
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