PayPal is set to cut 2,500 jobs as competition grows and share price drops
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The online payments giant PayPal is getting ready to cut as many as 2,500 jobs, according to recent reports. The figure represents 9% of the company’s entire workforce. The decision comes as part of the firm’s strategy against increasing competition and the failing share price.
PayPal to axe 2,500 jobs throughout 2024
PayPal’s decision was shared with the firm’s employees in a letter in which the company’s new CEO, Alex Chriss, addressed the situation. Chriss stated that the firm intends to “move with the speed needed to deliver for our customers and drive profitable growth.” To achieve this, however, PayPal has reached the decision to “right-size.”
The plan is to make direct cuts and eliminate open roles throughout the year. In other words, the company won’t axe 2,500 in a single day or week, but rather, it will do it gradually. Of course, this is still bad news for the company’s employees, but it will give them some time to prepare and potentially find an alternative in time.
Alex Chriss, PayPal’s acting CEO, took over the company only a few months ago, in September 2023. The company needed a change in leadership after missing revenue, adjusting operating margins, and netting new active user targets from the previous year.
PayPal continues to struggle in the changing market
The company has been facing increased challenges as its existing competitors continue to evolve and offer new and improved services. At the same time, new competitors started emerging in the market and rising rapidly, taking over a share of the market.
PayPal felt the effects of a harsher market in multiple ways, including seeing its stock price drop by more than 20% since last January. In an attempt to gain the edge over competitors, the firm started working on including AI — the hottest technology out there — into its service by releasing a host of new AI-driven features earlier this month.
Unfortunately, the features failed to impress the market, and the firm seemingly realized that it is running out of options. Now, like many other companies in the tech industry, it found itself in a position where cutting the workforce is its only remaining option.
PayPal was aware of the fact that this would eventually happen for quite some time now. In fact, a year ago, it revealed plans to cut 2,000 jobs. Its CEO at the time, Dan Schulman, stated that the firm had to reshape in order to address the challenging macro-economic environment.
Since the situation failed to improve in time, or even due to the release of new AI-powered features, PayPal has opted to proceed with these plans, although it also increased the figure to 2,500 jobs.
