PayPal to cut around 2,500 jobs as rivals snag market share
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A decision has been made to “right-size” PayPal through both direct cuts and the elimination of open roles throughout 2024.
PHOTO: REUTERS
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NEW YORK – PayPal Holdings will reduce its workforce by about 9 per cent as chief executive Alex Chriss, who took over in September, grapples with rising competition, profit pressures and a raft of analyst downgrades.
In a letter to staff on Jan 30, Mr Chriss said the decision was made to “right-size” the company through both direct cuts and the elimination of open roles throughout the year. Affected staff will be notified by the end of the week, according to the letter which was seen by Bloomberg News.
PayPal, which employed around 29,900 workers at the end of 2022, announced a similar round of cuts in January 2023.
The latest move will affect about 2,500 workers.
Eliminating jobs will allow the firm to “move with the speed needed to deliver for our customers and drive profitable growth”, Mr Chriss said in the letter.
“At the same time, we will continue to invest in areas of the business we believe will create and accelerate growth.”
Shares of the payments giant have plunged more than 20 per cent over the past year as earnings faltered and the company lowered its full-year guidance for adjusted operating margin.
PayPal named Mr Chriss in 2023 to replace Mr Dan Schulman.
PayPal was an early disrupter in the payments industry, but rivals including Apple and Zelle have since crowded the space, leaving PayPal struggling to keep pace.
At least four analysts downgraded the stock in January, citing a range of concerns, from rising competition to pressure on profitability.
Mr Chriss said on PayPal’s third-quarter earnings call that the company’s “cost base and complex structure” had slowed progress, an issue he plans on addressing to boost the firm’s operating leverage.
The company is set to report fourth-quarter results next week.
“There hasn’t been a lot to celebrate” over the past few years, Mr Chriss told CNBC earlier in January.
Since Mr Chriss took the helm, he has revamped PayPal’s leadership roles and made clear that he plans to streamline what grew into a bloated business during the Covid-19 pandemic.
Block, which offers the Cash App and Square payments services, began cutting jobs on Jan 30 as part of its goal to trim the workforce to 12,000 by the end of 2024.
Headcount as at the end of the third quarter of 2023 was just over 13,000, according to the firm. BLOOMBERG
