Also in this letter:
■ Paytm Payments Bank gets RBI nod to be Bharat Bill Payment Operating Unit
■ Supreme Court refuses to stay CCI order against Google
■ Top four IT companies see sharp drop in hiring in Q3
ShareChat fires over 500 employees in fresh round of layoffs
MohallaTech, the parent firm of vernacular social media platform ShareChat and short-video app Moj, has laid off over 500 employees or about 20% of its staff, according to an internal email sent by CEO Ankush Sachdeva.
This is the second recent round of layoffs at the company, which cut at least 100 jobs in December.
CEO’s email: “We are taking a very difficult decision today to part ways with around 20% of our talented [full-time employees] to ensure the financial health and longevity of our company in the current uncertain macroeconomic environment,” Sachdeva’s email to staff said.
He added, “In hindsight, we overestimated the market growth in the highs of 2021 and underestimated the duration and intensity of the global liquidity squeeze.”
Severance package: Affected employees will receive 100% of their variable pay until December 2022, the company said. They will also get their notice-period salary plus 15 days of monthly gross salary for each year served as a full-time employee.
Job cuts continue: We first reported about the impending layoffs at ShareChat on Monday morning. Large consumer internet firms are moving fast to rein in costs and are planning additional layoffs as 2023 begins on a cautious note, multiple sources and investors briefed on the matter told us.
Reliance Retail-backed Dunzo is also understood to have conducted 60-80 layoffs last week. Rebel Foods, which houses brands like Behrouz Biryani, Oven Story, has also cut its workforce.
Paytm Payments Bank gets RBI nod to be Bharat Bill Payment Operating Unit
Paytm Payments Bank said on Monday it has received final approval from the Reserve Bank of India to operate as a Bharat Bill Payment Operating Unit (BBPOU).
Jargon buster: Under Bharat Bill Payment System (BBPS), a BBPOU is allowed to facilitate bill payment services of electricity, phone, DTH, water, gas insurance, loan repayments, FASTag recharge, education fees, credit card bill and municipal taxes.
BBPS is owned by the National Payments Corporation of India.
So far, Paytm Payments Bank Ltd (PPBL) has been undertaking these activities with in-principle authorisation from RBI.
Quote: “With this approval, we will further increase the adoption of digital payments by merchant billers and enable them with secure, fast and convenient transactions. Through the Paytm app, users can make convenient payments for their bills and benefit from automatic payment and reminder services,” a company spokesperson said.
PA licence: In November, the RBI asked Paytm Payments Services to reapply for a payment aggregator (PA) licence and barred it from onboarding new online merchants until it did so.
Stock troubles: Paytm’s stock fell as much as 8.8% to Rs 528 on January 12 after China’s Alibaba Group sold a 3.1% stake in a block deal.
Shares of Paytm, which had last month announced an Rs 850 crore share buyback programme, have so far plunged around 75% from its IPO issue price of Rs 2,150.
Supreme Court refuses to stay CCI order against Google
The Supreme Court on Monday refused to stay the Competition Commission of India’s (CCI) order that directed Google to make changes to its Android ecosystem by January 19. The court asked the tech giant to explain whether it is “willing to put the same regime in India as it did abroad” and if the anti-trust directions are “inconsistent with the steps it had taken”.
The case will come up for hearing again on Wednesday.
Catch up quick: Google has challenged the National Company Law Appellate Tribunal’s (NCLAT) January 4 order that refused to stay a Rs 1,337.76 crore penalty imposed on it by the CCI for alleged anti-competitive practices last October. The NCLAT had also asked Google to deposit 10% of the penalty within three weeks.
‘Google treating India differently’: Additional Solicitor General R Venkataraman, appearing for CCI, and senior counsel Mukul Rohatgi, on behalf of OSLabs Technology, told the court the tech giant was discriminating against a “third world country like us” and treating it differently. “The European Union has already held Google in abuse of having a dominant position,” Venkataraman said.
In its defence, Google has claimed that it had been operating the Android mobile platform for the last 15 years and these “far-reacting changes” as directed by the anti-trust order will lead to “lasting and irreparable harm” to the company, device manufacturers, Indian consumers, app developers, and the wider Indian economy.
Top four IT companies see sharp drop in hiring in Q3
India’s top four IT companies together added less than 2,000 employees in the third quarter of FY23. The hiring slowdown began in the second quarter, when the four companies net hired 28,836, which was about half of what they had added in the first quarter.
Meanwhile, TCS and Wipro both saw a decline in net headcounts by 2,197 and 435 respectively. On the other hand, Infosys’s headcount grew by about 1,600 and HCL’s by 2,945.
Over-hiring: IT consultant Pareekh Jain said this quarter’s muted numbers were a correction to previous over-hiring.
Wipro CEO Thierry Delaporte said in Q1 the company had brought in a lot of talent from outside, and hired a record number of freshers. The reduction now, he said, is a reflection of the macroeconomic uncertainty.
“Big IT companies were on a hiring spree last year and it continued in the first two quarters of this year. There were two reasons for this. First, high demand after the pandemic, both for digital work and also cost-takeout deals. Second, the high attrition because talent was going to startups and global tech firms. Now, both factors are moderating,” he said.
Space sector seeks manufacturing incentive scheme, tax breaks
India’s nascent private space sector has presented a wishlist of tax incentives and a production-linked incentive (PLI) scheme for the upcoming Union Budget, saying these would boost local manufacturing and spur research and development.
Details: “In the 2023-24 budget, we would like to request a space-based production linked incentive (PLI) scheme for space tech startups to help boost local manufacturing and encourage capability building within the country,” Awais Ahmed, co-founder of Pixxel, a space startup based in Bengaluru, said.
“In the Budget 2023-24, we request a further Rs 100 crore issuance as viability gap funding (VGF) to set up new infrastructure,” Kranthi Chand, head of strategy and special projects, DhruvaSpace, said.
Chand also wants the government to allocate Rs 1,000 crore for the Defence Space Agency (DSA) for the procurement of new technology from the industry.
Today’s ETtech Top 5 newsletter was curated by Zaheer Merchant in Mumbai and Erick Massey in Delhi. Graphics and illustrations by Rahul Awasthi.