Amid growing competition from the likes of Square, Groupon and others, PayPal announced today that it will cut 325 fulltime jobs, or about 2.5 percent of its entire fulltime work force.
The eBay subsidiary will also cut 120 contracts, and will be forced to pay a fourth quarter $15 million pretax restructuring charge. The cuts will come primarily from PayPal’s product and technology organizations, as the company focuses on streamlining the production process.
According to a blog post titled “Today’s News,” by PayPal President David Marcus, the move is part of a product organization redesign that involves collapsing nine divisions into one.
“While PayPal is strong and performing well, making decisions that impact our employees was hard. So this is a difficult day at PayPal,” Marcus wrote.
“Unfortunately, making the right decisions on behalf of our customers meant we had to make some very tough decisions inside our company.”
The move comes as somewhat of a surprise given eBay’s strong Q3 earnings and PayPal’s significant increases in both registered accounts and profits. The payments processing giant saw a 14 percent increase in year-over-year user registration and a 23 percent increase in year-over-year revenue.