PayPal faces a new wave of layoffs.
The new CEO of the digital payments company, Alex Chriss, has announced in a letter to employees his decision to cut some 2,500 jobs, which implies a 9% cut in the workforce, according to the financial news agencies Bloomberg and Reuters, who have had access to the letter.
PayPal was one of the first disruptive companies in the payments sector, but its rivals, such as Apple, Zelle, new digital firms, card issuers and even traditional banks themselves, have complicated the competitive landscape.
In a letter to staff on Tuesday, Chriss said the decision had been made to “right-size” the company through direct cuts and the elimination of vacant positions throughout the year.
According to Bloomberg, the letter indicates that affected staff will receive notification by the end of the week.
The former CEO of PayPal, Dan Schulman, announced just a year ago another similar round of layoffs, in that case 7% of the workforce, about 2,000 jobs.
The company had about 29,900 workers at the end of 2022, according to the latest data published.
The job cuts will allow the company, based in San Jose, California, “to move with the speed necessary to deliver for our customers and drive profitable growth,” Chriss says in the letter cited by Bloomberg.
“At the same time, we will continue to invest in areas of the business that we believe will create and accelerate growth,” he adds.
The company plans to release its year-end 2023 results next week.
In the first nine months of last year, PayPal achieved revenue of $21,745 million, an increase of 8% over the previous year.
In addition, it came close to doubling its profit, going from 1,498 to 2,844 million dollars, according to figures reported to the United States Securities and Exchange Commission (the SEC).
The company's shares, however, have lost ground on the stock market as the company lowered its full-year guidance for adjusted operating margin.
When presenting the results of the third quarter of last year, the new CEO already referred to efficiency.
“My first 30 days at the helm of PayPal have confirmed my belief in the company's strong assets and market position.
Now, we must leverage these strengths and put the weight of the organization behind our most important priorities.
In the process, we will become more efficient so we can innovate and execute faster.
The opportunity to drive greater impact for our customers and unlock profitable growth makes it an exciting time to be at PayPal,” he said then.
In his view, the company's cost base and complex structure had been obstacles to its growth and profitability.
After taking office, Chriss has reorganized the company and renewed management positions.
To establish clear accountability for how PayPal serves customer needs, the company created three new business units aligned with the customers it serves: consumer, small business, and large business.
“By organizing our teams into defined business units, we focus on what is most important to our customers, leverage the power of our data and platform to deliver greater speed, and package our innovation in a way that differentiates us in the market.” market.
This will position us to drive significant growth for the company,” Chriss said in making the announcement.
Follow all the information on
Economy
and
Business
on
and
X
, or in our
weekly newsletter