PayPal Cuts 2,000 Jobs to Further Right-Size the Business

PayPal is laying off 2,000 employees as part of a transformation that includes cost-cutting.

The reductions will amount to 7% of the firm’s global workforce and will occur over the coming weeks, PayPal President and CEO Dan Schulman said in a Tuesday (Jan. 31) message to employees.

These and other adjustments come in response to changes in the world, among customers and throughout the competitive landscape, according to the message.

“Over the past year, we made significant progress in strengthening and reshaping our company to address the challenging macroeconomic environment while continuing to invest to meet our customers’ needs,” Schulman said in the message. “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.”

Some business units and teams will be more impacted than others, and these will be communicated to employees over the next days and weeks, according to the message.

“Change can be difficult — particularly when it includes valued colleagues and friends departing,” Schulman said in the message. “We’ll face this head-on together, drawing on the unparalleled scale of our global platform, the strategic investments we have made to strengthen our core capabilities, and the trust and loyalty of our customers.”

The latest moves come about a year after PayPal reported earnings that had been impacted by inflation and a post-pandemic return to in-person shopping that created headwinds for the firm.

Management noted during a February 2022 earnings call that eCommerce growth rates during the preceding holiday season were lower that industry expectations and that lower-income consumers spent less during the period.

Two months later, the company said that giving guidance was tough given the environment but that macro headwinds were present and impacting results.

“An uncertain economic macroenvironment with resulting shifts in consumer behavior has made visibility more challenging,” Schulman said in April 2022 during a quarterly earnings call.

To take advantage of PayPal’s “inherent network effect,” the firm has been doubling down on checkout, its PayPal and Venmo digital wallets and its Braintree platform, Schulman said in August.

Buy now, pay later (BNPL) has figured prominently in the firm’s ecosystem, too, with Schulman saying during a November earnings call that BNPL is “an integral part of our checkout strategy.”