PayPal is facing a new wave of layoffs. The digital payments company's new CEO, Alex Chriss, has announced in a letter to employees his decision to cut around 2,500 jobs, representing a 9% reduction in the workforce, according to financial news outlets Bloomberg and Portal accessing the letter. PayPal was one of the first disruptors in the payments sector, but its competitors such as Apple, Zelle, new digital companies, card issuers and even traditional banks themselves have complicated the competitive landscape.
In a letter to staff on Tuesday, Chriss said the decision was made to “right-size” the company through direct cuts and elimination of vacancies throughout the year. According to Bloomberg, the letter indicates that affected employees will be notified by the end of the week.
Former PayPal CEO Dan Schulman announced another similar round of layoffs just a year ago, in this case 7% of the workforce, or about 2,000 jobs. According to the latest published data, the company had around 29,900 employees at the end of 2022.
The job cuts will allow the San Jose, California-based company “to move forward at the pace necessary to serve our customers and drive profitable growth,” Chriss said in the letter cited by Bloomberg. “At the same time, we will continue to invest in business areas that we believe will create and accelerate growth,” he adds.
The company plans to report its 2023 year-end results next week. In the first nine months of last year, PayPal generated revenue of $21,745 million, an increase of 8% year over year. In addition, the company nearly doubled its profits from $1,498 million to $2,844 million, according to figures reported to the U.S. Securities and Exchange Commission (SEC). However, the company's shares have lost ground in the stock market as the company cut its full-year adjusted operating margin forecast.
When presenting the results of the third quarter of last year, the new CEO already referred to efficiency. “My first 30 days at the helm of PayPal have reinforced my belief in the company's strong assets and market position. Now we must leverage these strengths and put the weight of the organization behind our key priorities. This makes us more efficient so we can introduce and implement innovations more quickly. “The opportunity to create greater impact for our customers and achieve profitable growth makes it an exciting time to work at PayPal,” he said at the time. In his view, the company's cost base and complex structure were obstacles to its growth and profitability.
After taking office, Chriss reorganized the company and renewed leadership positions. To create clear accountability for how PayPal meets customer needs, the company created three new business units focused on the customers it serves: consumers, small businesses and large enterprises. “By organizing our teams into defined business units, we focus on what matters most to our customers, leverage the power of our data and platform to deliver faster, and package our innovations in a way that sets us apart in the market differentiated.” Market . This will enable us to drive significant growth for the company,” Chriss said in making the announcement.
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