Following the recent trend of layoffs and cost reduction, fintech firm PayPal has announced that it will cut down 9 per cent of its workforce, eliminating 2,500 jobs from its global offices. PayPal CEO Alex Chriss stated in his internal memo to employees that the company wants to drive more focus and efficiency and ‘right-size our business’.
The job reduction will be carried out throughout the year, with cuts affecting both existing roles and job listings that PayPal had planned to hire for. According to the internal memo, affected employees will be notified by the end of the week about their job termination.
“Across our organisation, we need to drive more focus and efficiency, deploy automation, and consolidate our technology to reduce complexity and duplication,” Chriss wrote in his memo to staffers (as reported by Bloomberg). The company will “continue to invest in areas of the business we believe will create and accelerate growth,” he further added.
PayPal, which had about 29,900 employees by the end of 2022, made a similar reduction in its workforce last January firing 2,000 employees from its global workforce. The current decision will impact around 2,500 workers making the total count of layoffs to around 4,500 employees.
Reportedly, PayPal has laid off some of its employees following its turbulent revenue and share performance. The payment giant’s shares have fallen by more than 20 per cent in the past year as its earnings dropped and it lowered its full-year forecast for adjusted operating margin. Notably, Chriss was appointed by PayPal last year to replace Schulman.
The challenges are also due to the increasing competition from rivals such as Apple Inc. and Zelle. PayPal which used to lead in the digital payments system is struggling to keep up with the changing market. This month, at least four analysts downgraded their ratings on the stock, citing various issues from increasing competition to profitability pressure.
Meanwhile, the recent trend of layoffs is widespread across the tech industry. According to a report by layoffs.fyi In the first month of 2024, almost 100 tech companies, including Meta, Amazon, Microsoft, Google, TikTok and Salesforce, have collectively laid off about 25,000 workers as part of their cost-cutting and restructuring strategies.
Google started the recent trend of job cuts by cutting more than a thousand jobs in its Assistant and hardware units, and warned of more layoffs to come. Amazon followed suit by laying off 500 employees at Twitch and hundreds more at Amazon Prime. Salesforce also reduced its workforce by 700 in January, while iRobot slashed nearly a third of its staff. Microsoft joined the list by letting go of 1,900 workers from Activision Blizzard and Xbox. Other companies that have announced layoffs include Flipkart, Swiggy, and more.
Source: Business Today
