New Delhi: The Regional Labour Commissioner of Bengaluru has reportedly summoned One97 Communications, the parent company of fintech major Paytm, over allegations of forced employee terminations. The notice, issued by the Regional Labour Commissioner (Central) under the Ministry of Labour and Employment, has drawn attention to the companys recent restructuring efforts.Contrary to initial reports, reports claimed that the notice was not a formal summon but rather an invitation to discuss the matter. A Paytm spokesperson emphasized their commitment to addressing employee concerns and working collaboratively with all stakeholders to ensure the best outcomes for their workforce.Restructure in PaytmAt the center of the controversy is Paytms recent restructuring exercise, which has affected at least 500 employees across various departments including payment gateway, devices, credit, and travel verticals. Amid the restructuring process, multiple former employees alleged Paytm of unlawful termination without appropriate compensation.Employees seek reinstatementIn June, several former Paytm employees approached the Ministry of Labour and Employment, seeking reinstatement and alleging unfair and unethical termination practices by the Paytm management. An ex-employee highlighted a clause in the offer letter that requires disputes to be resolved through a third-party arbitration committee.Former employees have reported that Paytms HR team encouraged them to resign voluntarily or face disciplinary actions. Moreover, there were claims of withheld joining and retention bonuses. These actions have intensified the grievances among the affected employees.Paytms response to layoffsPaytms spokesperson acknowledged the difficulty of the decision to transition employees but assured that the company has strived to provide the best possible support during the process. He said, As an organization committed to providing the best for our teams, we have strived to provide the best possible support to our transitioning employees and ensure fairness and transparency throughout the process.Paytm faces financial challengesPaytms financial challenges have added pressure to its restructuring efforts. The Reserve Bank of Indias regulatory actions against Paytm Payments Bank (PPBL) have contributed to growing losses. In the fourth quarter of the financial year 2023-24 (Q4 FY24), Paytms net loss tripled year-on-year to INR 550.5 crore, while revenue from operations decreased by 2.9% to INR 2,267.10 crore.
