PayPal Holdings, a US-based multinational financial technology firm, will reduce its workforce by about 9 per cent, news agency Bloomberg reported on Wednesday. Alex Chriss, chief executive officer (CEO), who took over in September, said the decision was made to "right-size" the company through both direct cuts and the elimination of open roles throughout the year. As per Bloomberg News, impacted employees will be notified by the end of the week.
PayPal named Chriss last year to replace Dan Schulman. The fintech firm, which employed around 29,900 workers at the end of 2022, announced a similar round of cuts last January. The latest move will affect about 2,500 workers. Eliminating jobs will allow the firm to "move with the speed needed to deliver for our customers and drive profitable growth," Chriss said in the letter. "At the same time, we will continue to invest in areas of the business we believe will create and accelerate growth."
Shares of the fintech major have plunged more than 20 per cent over the past year as earnings faltered and the firm lowered its full-year guidance for adjusted operating margin.
PayPal was an early disrupter in the payments industry, but rivals, including Apple Inc. and Zelle, have since crowded the space, leaving PayPal struggling to keep pace. At least four analysts downgraded the stock this month, citing a range of concerns from rising competition to pressure on profitability.
Chriss said on PayPal’s third-quarter earnings call that the firm's "cost base and complex structure" had slowed progress, an issue he plans on addressing to boost the firm’s operating leverage. The San Jose, California-based company is set to report fourth-quarter results next week. Since Chriss took the helm, he’s revamped PayPal’s leadership roles and made clear that he plans to streamline what grew into a bloated business during the pandemic.
Block Inc., which offers the Cash App and Square payments services, began cutting jobs Tuesday as part of its goal to trim the workforce to 12,000 by the end of the year. Headcount as of the end of the third quarter of last year was just over 13,000, according to the firm.