In a move aimed at streamlining operations, PayPal has announced plans to cut approximately 2,500 jobs, equating to around 9% of its worldwide staff, according to a letter from CEO Alex Chriss.
In the internal memo addressed to employees, Chriss outlined the decision to "right-size" the company, which will involve both direct layoffs and the elimination of unfilled positions throughout the year. Affected staff members are anticipated to receive notifications by the week's end.
Chriss emphasised the rationale behind the decision, stating, "We are doing this to right-size our business, allowing us to move with the speed needed to deliver for our customers and drive profitable growth."
The communication was subsequently shared on PayPal's website following the close of the market. The company's shares saw a marginal decline of 0.13% by the end of the trading day.
The move aligns with Chriss's earlier statements in November, where he expressed intentions to bolster revenue beyond transaction-related volumes and committed to trimming down the fintech firm's cost structure.
Despite initial optimism following the third-quarter results, analysts have remained vigilant about PayPal's profit margins in recent quarters. While the company's low-margin business offerings have experienced robust growth, its branded products have faced challenges due to intensifying competition, notably from rivals like Apple.
Investors are pinning hopes on Chriss, a former senior executive at software company Intuit, to rejuvenate PayPal's stock performance. The company witnessed a nearly 14% decline last year, failing to capitalise on the broader resurgence in high-growth technology shares.
In a separate development, PayPal unveiled plans to introduce new artificial intelligence-driven products and a one-click checkout feature last week.
Meanwhile, competitor Block, led by Twitter co-founder Jack Dorsey, has also initiated job cuts this week as part of its previously announced strategy to trim headcount and streamline expenses.