Team Siliconindia

• Paytm cuts 4,600 jobs, slashing  Rs 650 Cr in employee costs to drive profitability in FY25.
•  Q1 FY26 net profit hits  Rs 123 Cr, reversing a  Rs 840 Cr loss from last year.
• Antfin exits completely, ending all Chinese ownership in Paytm.

Paytm has reduced its employee base by more than 10% and cut staff expenses by  Rs 650 crore in FY25, indicating a sharp strategic transition towards profitability and focus on core business after regulatory turmoil.

As per its FY25 annual report, the fintech giant’s headcount dropped from 43,960 to 39,368 a net cut of 4,600 roles. A dominant share of the remaining 32,614 employees are now in sales, indicating a pivot toward distribution and frontline expansion.

Operating expenses excluding ESOPs decreased 21% from FY24 to  Rs 2,473 crore from  Rs 3,124 crore, reversing an elevated 34% rise in the previous year. Paytm credited the cost savings to a streamlined org structure, augmented productivity due to automation, and sales workforce prioritization.

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Restructuring Triggered by RBI Crackdown

The layoffs follow the Reserve Bank of India's March 2024 ruling that suspended operations of Paytm Payments Bank, affecting the company's payments and banking businesses over issues of non-compliance. Follow-on layoffs attracted labor grievances, which were settled in July 2024 after Paytm committed to paying notice periods and retention of joining bonuses.

Despite these disturbances, cost management enabled Paytm to turn the corner to profitability. During Q1 FY26, it reported a net profit of  Rs 123 crore after a year ago an  Rs 840 crore loss.

ESOP charges were low at  Rs 30 crore for the quarter, primarily due to delayed stock grant. For the entire year, ESOP expenses are estimated at  Rs 250–275 crore.

Antfin's Exit Means the End of Chinese Ownership

Paytm similarly experienced a remarkable change in shareholder composition. Chinese company Antfin, which is associated with Alibaba Group, disposed of its remaining 5.84% holding ( Rs 3,800 crore) through a block deal at  Rs 1,020 per share, exiting the cap table entirely. In the past two years, SoftBank, Berkshire Hathaway, and Alibaba have also offloaded.

As of June 2025, only one large pre-IPO investor, Elevation Capital, has 15.4% holdings. According to analysts, Chinese ownership is no more welcome with the current regulatory and geopolitical issues regarding data sovereignty and foreign capital.

New Chapter: Leaner, Profitable, India-Backed

In a letter to shareholders, founder and CEO Vijay Shekhar Sharma penned:

Now that we have crossed the profitability milestone, I am delighted with our team for their disciplined execution. We made some difficult decisions, shed businesses, doubled down on payments, and protected our cash balances.

With streamlined operations, an India-focused cap table, and a focus on monetizable growth in refreshed form, Paytm is making a new map. But as regulatory focus increases and competition becomes more fierce in the fintech sector, holding on to this turnaround will be its greatest challenge to date.