PayPal to ‘Right-Size’ Operations, Cutting 2,500 Jobs Globally

PayPal Holdings, the digital payments giant, said on Tuesday that it would cut about 2,500 jobs, or 9 percent of its global workforce, this year, as it faces increasing pressure from competitors and rising costs.

The company’s chief executive, Alex Chriss, announced the decision in a letter to employees, saying that the move was necessary to “right-size” the company and improve its profitability and agility.

“We are doing this to right-size our business, allowing us to move with the speed needed to deliver for our customers and drive profitable growth,” Mr. Chriss wrote.

The staff who will be affected are expected to be notified by the end of the week, the company said. The job cuts will be across all functions and regions, and will include both direct reductions and the elimination of open roles.

PayPal, which was spun off from eBay in 2015, has been struggling to maintain its dominance in the online payments industry, as new entrants such as Apple, Zelle and Block offer faster, cheaper and more convenient alternatives.

The company’s revenue growth has slowed in recent quarters, while its margins have been squeezed by its low-margin products, such as Venmo, the popular peer-to-peer payment app, and PayPal Credit, its consumer lending service.

Mr. Chriss, who joined PayPal from Intuit, the software company, last year, has vowed to revamp the company’s strategy and product portfolio, and to reduce its cost base.

In November, he said he expected to increase revenue outside of purely transaction-related volume, and to invest in new artificial intelligence-driven products and services, such as a one-click checkout feature and a personalized shopping assistant.

He also said he planned to expand PayPal’s presence in emerging markets, such as India and China, where the company faces regulatory hurdles and fierce competition from local players.

PayPal’s shares rose 0.5 percent on Tuesday, after the news of the job cuts was reported by several media outlets. The stock has fallen by more than 20 percent in the past 12 months, underperforming the broader technology sector.

PayPal is not the only technology company that has resorted to layoffs in recent months, as the industry grapples with the impact of the coronavirus pandemic, high inflation and weak consumer demand.

According to Layoffs.fyi, a website that tracks technology industry job cuts, more than 260,000 jobs were lost in the sector last year, and almost 100 tech firms have announced a total of 25,000 job cuts in just the last month.

Among them are Meta, Amazon, Microsoft, Google, TikTok and Salesforce, which have cited various reasons for their workforce reductions, such as restructuring, streamlining, consolidation and optimization.

Block, the cryptocurrency company led by Twitter’s co-founder Jack Dorsey, also began cutting jobs this week, as part of its previously disclosed plans to trim its headcount by 1,000 by the end of the year.

Some technology industry workers have pushed back against the layoffs, arguing that they are unnecessary and unjustified, given the huge profits and valuations of some of the tech giants.

Earlier this month, a union representing workers at Google said it was “needless” for the tech giant to cut hundreds of jobs when it makes billions of dollars a year.

The union also accused Google of using the layoffs as a pretext to get rid of workers who have been vocal about issues such as diversity, ethics and labor rights.

PayPal did not comment on whether the job cuts would affect any of its unionized workers, or whether it would offer any severance or assistance to the affected employees.