PayPal, owner of the electronic payment system of the same name, wants to reduce its workforce by around 9%. CEO Alex Chriss, who took office last September, said in a letter to staff that the decision had been made “optimize” Companies through layoffs and elimination of vacancies during the year.
Employees affected by layoffs will be notified by the end of the week. Around 2,500 jobs will be affected by the cuts. The company also announced similar staff cuts in January last year. At the end of 2022, around 29,900 people were employed.
The company wants to enable job cuts “Evolve at the pace necessary to deliver services to customers and drive profitable growth” Criss stated in the letter. “At the same time, we will continue to invest in business areas that we believe will support and accelerate growth.” remarked the head of PayPal.
The company’s profits fell last year and the company lowered its full-year forecast for adjusted operating margin, causing the stock to fall 20% for the year. At least four analysts have downgraded PayPal shares this month, citing a range of issues ranging from increasing competition to pressure on profitability.
Criss stated this during the third quarter 2023 earnings conference call “Cost base and complex structure” PayPal has slowed its progress, an issue it wants to address to improve the company’s operating leverage.
Accordingly BloombergBlock, which offers payment services Cash App and Square, has also begun job cuts to reduce its workforce to 12,000 by the end of the year. At the end of the third quarter of last year, Block employed just over 13,000 people.