PayPal Holdings Inc. joins the wave of mass layoffs in the tech sector. The digital payments platform announced that it plans to cut 7% of its global workforce, around 2,000 jobs, as part of a cost-cutting plan. President and CEO Dan Schulman said in a statement:
Today, I’m writing to share the difficult news that we will be reducing our global workforce by approximately 2,000 full time employees, which is about 7% of our total workforce.
The company pointed to the "challenging macro-economic environment" and recognizes that its efforts to reduce costs have not been sufficient, so it has to "make hard decisions":
While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do. We must continue to change as our world, our customers, and our competitive landscape evolve.
Schulman informed that the layoffs will take place in the coming weeks, although he did not specify which units or departments will be affected. He described his employees as "valued colleagues" and stressed that they will be offered "generous [severance] packages" and assist in their professional "transitions."
Share prices rise on Wall Street
Following the news, the value of PayPal shares on the Wall Street stock exchange rose 2.32% to $81.14. This is perceived as a reflection of investor approval regarding the decision to cut staff. The company's share price dropped 54% in 2022.
In November of last year the company's cut its forecast for annual revenue growth in anticipation of a broader economic downturn. Executives stated at the time that they were were in a challenging macro-financial environment and the slowdown in the e-commerce boom were forcing it to be cautious with its forecasts.
"Similar to other tech companies, PayPal is seeking to position itself financially and strategically, bracing for an economic slowdown," said Moshe Katri, an analyst at Wedbush.
