Naspers-owned fintech major PayU has decided to layoff a sizeable number of employees of PaySense, the electronic credit firm it acquired in an all-cash deal in early this year.
The firm didn’t disclose the number of employees who are being or have been, laid off, even though a PayU spokesperson confirmed the growth. According to sources familiar with the matter, It’s mostly those working in sales and operations department, have been affected the most.
“As we progress to be future prepared and find efficiencies within our business and automate, certain roles and functions become redundant. Where possible we’ve absorbed, roles that are repurposed or re-skilled to keep as many people as possible. We’re working hard with those impacted to help them through this transition period,” that a PayU spokesperson told ET.
However, the PayU spokesperson argued that the decision to layoff employees is not influenced by the ongoing Covid-19 pandemic, but had been also a consequence of the company automating a variety of processes.
The company also clarified that regular digitization of processes enable them to construct the end-to-end digital business and continue towards automation.
The company has decided to let go of its employees just about seven months following the fintech giant, which counts India because its biggest market, acquired a vast majority stake in Mumbai-headquartered PaySense, valuing the latter.
PayU had also stated that Lazypay, its existing lending business, would be merged with PaySense, to make a unified digital platform. The company has also decided to infuse $200 million at the latter over the subsequent 24 months, a sum that included a direct investment of $65 million, thus making the deal size to over $300 million, or more than Rs 2,100 crore.
PayU layoff has come at the time when the shadow banking business in India was under prolonged stress that has been further exacerbated by the outbreak of pandemic that has tanked the economy and bought under various unprecedented challenges.
The financial sector of India is expected to go under huge stress as the consumers and businesses are put under tests by the global outbreak of Coronavirus. The country has come to stand still and the market is yet to revive with full force. As companies have started cutting corners mass job losses are inevitable. It’s expected that unemployment in India will reach an all-time high in 2020 and 20201. All of this will have a direct impact on the financial capabilities and borrowing capacity of individuals and companies.
In April we reported that Coronvirus cost 50 million people their employment in just 2 weeks of the nationwide outbreak. As the curve is showing sign of flattening, experts believe that the situation may go bad to worse in the months to come.
Founded in 2015, PaySense relies on data science technology to check people’s eligibility for availing loans and provided them the amount almost instantly. Users can apply for a loan smartphone and within few minutes the backend engine is able to validate the users and gets updated with borrowing capabilities of a loan seeker.
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