PayPal to cut 2,000 jobs in push to trim costs
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PayPal is the latest in a list of Big Tech firms to be hit by the economic slowdown.
PHOTO: REUTERS
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NEW YORK – PayPal Holdings said on Tuesday it is planning to cut 7 per cent of its workforce, or about 2,000 employees, the latest in a list of fintech firms to be hit by the economic slowdown.
The payments company also joins Big Tech firms and Wall Street titans that are executing layoffs across corporate America as companies look to rein in costs to ride out the downturn.
PayPal’s move to keep a tight lid on costs comes against the backdrop of decades-high inflation hitting the purchasing power of consumers who also have to contend with the threat of a looming recession.
The cuts will take place in the coming weeks, chief executive Dan Schulman told employees in a memo.
“While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do,” Mr Schulman said.
PayPal shares, which lost about 60 per cent of their value in 2022, closed up 2.3 per cent on Tuesday.
Its stock has been battered by the slowdown in growth in payments volume on its platform after the Covid-19 pandemic began to recede. In response, the company has vowed to reduce expenses – including through job cuts and the shuttering of offices across the country.
Those moves should have helped the company notch US$900 million (S$1.18 billion) in savings in 2022 and at least an additional US$1.3 billion in 2023, Mr Schulman has said.
PayPal – like many other so-called pandemic darlings – saw headcount swell when the virus forced governments around the world to issue lockdown orders, spurring consumers to do more shopping online. Now, as those orders have lifted and supply chains remain under pressure, consumers have returned to in-store shopping in droves.
PayPal is expected to report that payments volume on its many platforms climbed to US$1.4 trillion in 2022, according to analyst estimates compiled by Bloomberg. While that is a 9.6 per cent increase from a year earlier, that would still mark the lowest level of growth in the firm’s history as a public company, the data shows. BLOOMBERG, REUTERS
