PayPal has announced plans to reduce 9% of its workforce globally as the company struggles with rising competition from rivals such as Apple, Zelle and Block.
PayPal is a payment platform that enables payments between parties through online money transfers. Established in 1998, PayPal rose to become a global leader in online payment solutions with more than 325 million accounts worldwide.
Chief executive officer Alex Chriss said, the decision was made to “right-size” the company “through both direct reductions and the elimination of open roles”. He said that the company will notify employees affected by the end of the week.
Paypal had employed 29,000 workers by the end of 2022 but in January last year, it conducted a similar round of cuts .This year the company aims to layoff about 2,500 workers.
According to Chriss, this move will allow the company to move with the speed needed to deliver for their customers and drive profitable growth while they continue to invest in areas of the business that are likely to create and accelerate growth.
Besides, Paypals shares have also reduced more than 20% over the past year as earnings faltered and the company lowered its full-year guidance for adjusted operating margin.
Chriss stated that that the firm’s cost base and complex structure had slowed progress, and that he plans to address it to boost the firm’s operating leverage.
Chriss, joined Paypal in September from a software company Intuit ,where he worked as a senior executive. He is expected to revive PayPal’s stock, which is down more than 22% from January 2023 due to margins which have underwhelmed investors.
In November, PayPal reported its first earnings under its new boss, which topped analysts expectations, giving investors some hope that its turnaround was underway.
Recently, Paypal launched a new artificial intelligence-driven products as well as a one-click checkout feature .This is the first major announcement under Alex Chriss, aimed to inject new life to the payments company.