PaisaBazaar, the digital lending arm of PolicyBazaar recently said that it has laid off about 1,500 employees to bring down operational costs as the company’s business struggles due to the coronavirus pandemic.
According to a Mint report, the layoffs constitute about half of the company’s workforce and are predominantly from roles involving operations and business acquisitions. The Softbank-backed group’s company has been witnessing a decline in loan demand by almost 90% during the pandemic.
An estranged employee said to Mint that “…Laid off employees have been asked to serve a month’s notice ending 30 June, and close to 100 employees along with some senior executives, have been absorbed into Policybazaar.”
However, there is no official response from the company on the development yet.
The online lending industry has been deeply affected by the COVID-19 pandemic, with lenders reporting a drop in approval rate for new loans. The pandemic has left most digital lenders struggling to raise fresh liquidity from banks and non-banking financial companies (NBFCs) for further lending, which has also resulted in a spike in borrowing or interest rates.
Recently in May, another fintech lender laid off employees due to the pandemic. Bengaluru-based Lendingkart had laid off 30% of its workforce, impacting 200 employees.
This was just a week after the company raised ₹319.24 crores as part of its Series D round, led by existing investors Fullerton Financial Holdings Pte Ltd, Bertelsmann India Investments, Sistema Asia Fund, and IndiaQuotient.
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