Big tech seems to be making layoffs due to the global economic downturn and upcoming challenges in this area. Today, PayPal announced that it will lay off about 2,500 employees, or about 9% of its workforce.
According to Bloomberg, PayPal CEO Alex Chriss said in a letter to employees that the job cuts were necessary to right-size the company and "move with the speed needed to deliver for our customers and drive profitable growth."
At the same time, we will continue to invest in areas of the business we believe will create and accelerate growth. There hasn’t been a lot to celebrate.
Chriss, who became CEO in September 2023, is facing increased competition in the digital payments industry. Rivals such as Apple Pay and Square have gained popularity and market share, putting pressure on PayPal"s business.
In addition, profit margins have narrowed in recent quarters as costs have risen. PayPal shares have fallen more than 20% in the past year as the company has lowered its financial guidance. Chriss also acknowledged on an earnings call that the company"s "cost base and complex structure" have slowed progress.
PayPal currently employs approximately 30,000 people worldwide. Upon completion of the latest round of layoffs, the number of employees will be reduced to roughly 27,000. The layoffs will primarily affect open positions and roles that have not yet been filled. PayPal said it will contact affected team members by the end of this week.
Last year, PayPal announced that it would gradually lay off 2,000 employees. Former CEO Dan Schulman assured those affected that they would be offered generous packages and the support they needed to transition.
With these layoffs, PayPal joins other tech companies such as Microsoft"s Xbox, Riot Games, Salesforce, and Embracer. Yesterday, it was reported that 97 team members at developer Eidos Montreal have been laid off. In a shocking move, Microsoft laid off 1,900 employees from Activision-Blizzard, ZeniMax and Xbox.