According to two senior recruiters, there are a lot of resumes from Paytm in the market, spanning corporate, business, and technology roles.
The recruiters, who spoke on condition of anonymity, said the resumes started coming ever since RBI’s restrictions were imposed on Paytm Payments Bank, with the flow increasing of late.
On 31 January, the Reserve Bank of India (RBI) barred the payments bank from accepting customer deposits after the end of February, which was later changed to 15 March. This stricture crimped the company’s ability to do business.
“Many of them (employees) had joined the company when things looked much different. Now they believe their growth aspirations will be curtailed if they do not look for other opportunities,” said one of the recruiters who specialises in senior-level hires. “We also have a bunch of CVs (curriculum vitae) with us from Paytm job-seekers.”
High pay, low demand
The recruiter cited above said that moving out of Paytm might not be easy for these employees since their salaries are 20-30% above the levels seen in the market.
“Their salaries are much higher than what other companies pay since they were hired from good organisations in the e-commerce space and other well-paying sectors,” said the recruiter.
This was seconded by the chief executive of a bank who said that Paytm employees are difficult to absorb because of their salaries.
Another senior recruiter said that Paytm employees are often being forced to take a 20% pay cut as the value of ESOPs (employee stock ownership plan)—included in the overall cost to company or CTC—eroded over time.
Paytm has lost over half of its market value since RBI clamped down on its payments bank in January, showed data from Bloomberg.
Meanwhile, a senior banking recruiter from one of the leading search firms said, “Many are moving from fintech space to core banking but recruitments in BFSI are no more at a frenzied pace. For CXOs, interviews are tougher since approval from RBI — a requirement for banks before appointing a director — will become a concern.”
A Paytm spokesperson said the company has expanded the leadership team to strengthen succession planning and work directly with the senior management.
“We will also be looking at promoting our high-performing employees to senior leadership. This commitment positions us as an employer of choice amongst our peers,” the spokesperson said in an emailed statement. “We continue to appreciate the resilience of our employees during these times. As we look to recover fully in terms of business, we will also be looking to add new talent, especially at senior levels.”
Result woes
On Wednesday, Paytm’s parent One 97 Communications reported a net loss of ₹550 crore for the March quarter, as against a loss of ₹168 crore in the same period last year, with the company taking an impairment of ₹227 crore on its investment in the payments bank.
Analysts at Sanford C. Bernstein (India) said after the results that positives include the fact that merchant loans have seen a revival in April after seeing a complete shutdown in February and the volumes are back at 86% of January value.
Among the negatives, Paytm has pivoted to doing more distribution-only loans where the company is not responsible for collections and hence receives no collection incentive.
“If this becomes a permanent switch, this would create a much weaker model in our view — more of a loan distribution agent (DSA) than a partner that adds more value as a loan service provider,” they said in a note to clients on Wednesday.
The company on Wednesday said its employee costs have increased due to investments in technology, merchant sales, and financial services in recent years.
“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. We expect annualized people cost savings of ₹400-500 crore,” it said in its earnings statement to the stock exchanges.
The company and its payments bank have seen some changes at the top, the most recent being the resignation of president and chief operating officer Bhavesh Gupta on 4 May.
Gupta, in charge of the payments and lending businesses, decided to leave citing “personal reasons”. Earlier, Surinder Chawla resigned from his role as managing director and chief executive of Paytm Payments Bank on 8 April due to “personal reasons” and to “explore better career prospects”.