Payments Firm PayPal to lay Off 7% of its Workforce to Cut Costs – PayPal Holdings Inc. intends to lay off approximately 7% of its workforce as part of broader cost-cutting efforts. In an email to employees Tuesday afternoon, CEO Dan Schulman revealed the layoffs, which will affect around 2,000 PayPal employees. “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,” Schulman said in the note.
“We must continue to change as our world, our customers, and our competitive landscape evolve.” Some parts of PayPal will be impacted “more than others,” and staffers will find out more details about the impacts to their business units and teams over “the next days and weeks.” The company will continue to hire “strategically” this year, spokeswoman Amanda Miller stated.
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PayPal was a significant winner in the early stages of the pandemic, gaining from rising e-commerce use as well as growing interest in peer-to-peer services that allow individuals to tip workers or send money to friends without leaving their homes. However, growth has slowed since then, and last year, PayPal launched a cost-cutting strategy as well as a fresh focus on its fundamental competencies. In August, the corporation stated that it hoped to save at least $1.3 billion in costs by 2023.
“This focus on efficiency, while continuing to invest in key growth areas, is a high priority for us,” Schulman reiterated on PayPal’s third-quarter earnings call in November as he discussed a target for 100 basis points in operating margin expansion during 2023. PayPal slowed the growth of its non-transaction-related expenses to 4% in the third quarter from 17% the year before. Schulman said that he expected this growth to be “flat to slightly negative” in the fourth quarter and in 2023.
The company’s cost-cutting measures have been well received on Wall Street, with Truist Securities analyst Andrew Jeffrey mentioning them in an upgrade of PayPal’s stock earlier this month. PayPal joins a number of technology companies that have announced layoffs in recent months, including e-commerce companies Amazon.com Inc. AMZN, 2.31%, Shopify Inc. SHOP, 4.67%, and Stripe.