Amid ongoing layoffs at Paytm, several employees have approached the Ministry of Labour and Employment, alleging “unlawful termination” without compensation. According to Moneycontrol, multiple Paytm employees have filed complaints on the ministry’s Samadhan portal. These grievances, dated from June 1 to June 12, seek reinstatement of employment, citing unfair and unethical termination practices by Paytm management.
Complaints and Legal Routes
The online complaints include supporting documents such as emails and other papers. A complainant reportedly stated, “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.” Another laid-off employee mentioned a clause in the offer letter requiring disputes to be resolved via a third-party arbitration committee, preventing direct court action initially.
Support from All India Professionals’ Congress
The All India Professionals’ Congress (AIPC) has extended its support to the impacted employees of Paytm. In a post on X, the Congress wing sought details from employees allegedly “forced to resign without compensation.” AIPC stated, “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.”
Voluntary Resignations and Disciplinary Actions
This support comes after Inc42 reported that Paytm was forcing employees to resign voluntarily or face disciplinary action. Many aggrieved employees claimed that Paytm was looking to claw back the joining and retention bonuses of the employees. This strategy has reportedly increased the pressure on employees to comply with the company’s demands.
Paytm’s Financial Struggles
The development comes at a time when Paytm is grappling with multiple challenges. 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. As a result, Paytm’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), while net loss soared 3X YoY to INR 550.5 Cr during the same period.
Cost-Cutting Measures and Leadership Changes
To rein in the losses, Paytm has been aggressively cutting costs and streamlining operations, resulting in mass layoffs. In a letter to shareholders on May 22, founder and CEO Vijay Shekhar Sharma said that cutting employee costs could save the company up to INR 400 Cr to INR 500 Cr annually. Meanwhile, top-level exits continue at Paytm, with Neeraj Arora resigning as the non-executive independent director and being replaced by former SEBI board member Rajeev Krishnamurilal Agarwal.
