PayPal has announced a workforce reduction of 9%, around 2,500 employees globally. The decision, communicated by CEO Alex Chriss in a letter to staff, comes just a year after the company’s previous layoff of 7% of its workforce.
This development is part of a trend in the tech industry, with other major players such as Block, Google, eBay, Riot Games, TikTok, Microsoft, Amazon, Unity, and Duolingo also announcing job cuts in January 2024.
PayPal’s strong financial performance throughout 2023, with revenue reaching $7.42 billion and double-digit growth in transactions over its platform, CEO Alex Chriss addressed the need to address high costs that were slowing us down.
The company faces competition from newer entrants in the payments industry, such as Zelle and tech giants like Apple. Bloomberg reported that four analysts downgraded PayPal’s stock this month.
Alex Chriss, who took over as CEO in September 2023, stated in a memo that the company plans to “drive more focus and efficiency, deploy automation, and consolidate our technology to reduce complexity and duplication.”
The industry’s layoffs in 2024 have not spared even the most major players. Jack Dorsey’s Block, responsible for Cash App and Square, initiated its second round of layoffs within two months, affecting nearly a thousand employees.
Google, under CEO Sundar Pichai, laid off over a thousand workers in its Assistant and hardware divisions, with warnings of additional cuts throughout the year.
Other companies like Discord, eBay, Riot Games, TikTok, Microsoft, iRobot, Amazon, Unity, and Duolingo collectively cut thousands of jobs in January.
The company is now struggling with increased competition and consumer preferences. Rivals like Apple and emerging technologies such as Zelle are putting pressure on PayPal to adapt and innovate.
While the company reported strong financial results in 2023, including revenue growth of over 8%, its stock has faced a decline of more than 20% in the past year.
Investors are expressing concerns about the company’s ability to the competitive market and maintain profitability.
In an internal memo to employees, CEO Alex Chriss said the difficulty of the decision, stating, “These decisions were not easy to make, and we are undertaking these actions with tremendous care and consideration.”
The company is committed to supporting affected employees through the transition with respect, support, and compassion. Notifications to impacted employees are expected to be completed by the end of the week.
The layoffs in the tech industry in early 2024 goes along with PayPal, with companies like UPS also announcing job cuts.
According to Layoffs.fyi, nearly 100 tech companies, including Meta, Amazon, Microsoft, Google, TikTok, and Salesforce, have laid off approximately 25,000 workers as part of cost-cutting and restructuring.