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In a bid to recalibrate its operations amidst mounting competition in the digital payments sphere, PayPal has announced a significant workforce reduction, affecting 9% of its global staff.
Chief Executive Officer Alex Chriss conveyed the decision to employees, emphasizing the need to “right-size” the company in response to evolving market dynamics.
The affected personnel, totaling 2,500 employees, will receive notifications by the end of the week, PayPal confirmed. This move comes just a year after a similar restructuring effort, underscoring the company’s ongoing efforts to streamline its operations and adapt to a rapidly changing landscape.
With rivals like Apple, Zelle, and Block intensifying their presence in the digital payments arena, PayPal finds itself under increasing pressure to maintain its market position. Mr. Chriss, who was appointed from software company Intuit last year, has been tasked with steering PayPal through this challenging period and reviving its flagging share price, which has witnessed a decline of over 20% in the past year.
Despite reporting encouraging earnings in November, surpassing analysts’ expectations, PayPal continues to face headwinds in the competitive market. The company recently rolled out new artificial intelligence-driven products and a one-click checkout feature in a bid to stay ahead of the curve.
The decision to downsize its workforce mirrors a broader trend in the technology sector, with numerous industry giants implementing layoffs in response to various challenges. In the past month alone, nearly 100 tech firms, including Meta, Amazon, Microsoft, Google, TikTok, and Salesforce, have collectively announced 25,000 job cuts.
Block, spearheaded by Twitter co-founder Jack Dorsey, has also initiated job cuts as part of its strategy to reduce its workforce by 1,000 by year-end. The rationale behind these layoffs has been attributed to factors such as pandemic-related hiring surges and high inflation, which have dampened consumer demand.
However, not all technology industry workers are passive recipients of these decisions. Earlier this month, a union representing Google employees criticized the tech giant for its job cuts, questioning the necessity of such measures given its substantial annual profits.