PayPal Holdings, Inc PYPL has initiated company-wide layoffs, impacting around 9% of its workforce, or approximately 2,500 employees. CEO Alex Chriss confirmed this development to employees in a letter.
In the letter, Chriss emphasized the need for greater focus, efficiency, automation, and reduced organizational complexity.
He indicated 2024 would be a year of significant changes, including challenging decisions to streamline operations, TechCrunch reports.
This layoff announcement follows a similar move nearly a year ago, where PayPal planned to reduce its workforce by 2,000 employees, about 7% of its staff.
Recently, the company has seen several changes in its executive team, with Chriss, a former Intuit executive, joining as CEO in September and focusing on diversifying revenue sources.
PayPal has been focusing on innovation, announcing the launch of new AI-driven products and a one-click checkout feature, demonstrating its commitment to adapting to changing market demands, Reuters reports.
Archie Deskus transitioned to Chief Technology Officer, and Jamie Miller became the CFO.
Despite its growth through acquisitions like Venmo, Xoom, and Honey, PayPal has faced stiff competition from companies like Apple Inc AAPL and Stripe.
Despite a boost in PayPal’s stock following the third-quarter results and Chriss’s announcement, analysts have expressed concerns about the company’s margins, particularly given the competitive pressures from rivals such as Apple.
The financial technology firm has experienced robust growth in its low-margin business products while its branded offerings have seen a slowdown.
In the broader payments sector, PayPal’s competitor Block Inc SQ, led by Twitter co-founder Jack Dorsey, is also undergoing workforce reductions as part of its cost-cutting initiatives.
Amazon.Com Inc AMZN recently discontinued using Venmo as a payment option. Additionally, PayPal has faced legal challenges, including a class action lawsuit over its anti-steering rules that allegedly limit competition against lower-cost payment platforms.
In May 2022, the company also laid off several employees from its San Jose headquarters.
Price Action: PYPL shares traded lower by 1.05% at $63.01 premarket on the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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