In line with CEO Alex Chriss's earlier November statements about boosting revenue beyond transactions and reducing costs, PayPal is set to cut about 2,500 jobs, or approximately 9% of its global workforce. An internal memo from Chriss outlines the company's plan to "right-size" through layoffs and the removal of unfilled positions, with affected employees expected to be notified by week's end.
Chriss underscored the reasoning behind the move, explaining, "This is to appropriately size our business, enabling us to act swiftly in meeting customer needs and fostering profitable growth."
Following the market's closure, the announcement was posted on PayPal's website. The company's shares experienced a slight dip of 0.13% by the end of the trading day.
The decision is consistent with Chriss's prior remarks in November, where he articulated plans to increase revenue beyond transaction-related metrics and pledged to streamline the fintech firm's cost structure.
Despite positive sentiments after the third-quarter results, analysts have been cautious about PayPal's profit margins in recent quarters. Although the company's low-margin business segments have shown strong growth, its branded products have encountered difficulties, mainly due to escalating competition, particularly from rivals like Apple.
Investors are banking on Chriss, a former senior executive at software company Intuit, to revitalize PayPal's stock performance. The company faced an almost 14% decline last year, missing out on the broader resurgence seen in high-growth technology shares.
In a distinct development, PayPal recently revealed intentions to launch new artificial intelligence-driven products and introduce a one-click checkout feature.
On a parallel note, competitor Block, helmed by Twitter co-founder Jack Dorsey, has also initiated job cuts this week as part of its previously disclosed strategy to reduce staff and streamline expenses.
