PayPal to lay off 7% of employees as part of cost-cutting push
PayPal Holdings Inc. plans to lay off about 7% of its staff as it continues with broader efforts to reduce costs.
Chief Executive Dan Schulman announced the layoffs, which will affect about 2,000 PayPal
PYPL,
employees, in an email to the staff Tuesday afternoon.
“While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do,” Schulman said in the note. “We must continue to change as our world, our customers, and our competitive landscape evolve.”
Some parts of PayPal will be impacted “more than others,” and staffers will find out more details about the impacts to their business units and teams over “the next days and weeks.”
The company will continue to hire “strategically” this year, spokeswoman Amanda Miller told MarketWatch.
See also: More than 75,000 tech-sector employees have lost their jobs since the start of the year
PayPal was a big winner in the early part of the pandemic, benefiting from surging adoption of e-commerce as well as growing interest in peer-to-peer services that let people tip workers or send money to friends in a contactless manner. But growth has slowed since then, and PayPal announced a cost-cutting initiative last year along with a renewed focus on its core strengths.
The company said in August that it was targeting at least $1.3 billion in cost savings during 2023.
“This focus on efficiency, while continuing to invest in key growth areas, is a high priority for us,” Schulman reiterated on PayPal’s third-quarter earnings call in November as he discussed a target for 100 basis points in operating margin expansion during 2023.
PayPal slowed the growth of its non-transaction-related expenses to 4% in the third quarter from 17% the year before. Schulman said that he expected this growth to be “flat to slightly negative” in the fourth quarter and in 2023.
The company’s moves to cut expenses have resonated on Wall Street, with Truist Securities analyst Andrew Jeffrey citing them in an upgrade of PayPal’s stock earlier this month.
PayPal joins a host of technology companies that have announced layoffs in recent months, including Amazon.com Inc.
AMZN,
Shopify Inc.
SHOP,
and Stripe, which are all in the e-commerce landscape.
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