PayPal to lay off 9% of staff in 2024

PayPal Holdings (NASDAQ:) said it will cut its workforce by approximately 9% in 2024, Bloomberg News reported on Tuesday.

This decision, part of the company’s restructuring efforts under new CEO Alex Chriss, comes amidst increased market competition, profit challenges, and a series of analyst downgrades.

In a recent letter to employees, Chriss outlined the strategy as a necessary step to streamline operations. This will involve direct layoffs as well as the elimination of existing open positions throughout the year. Employees who will be impacted by this decision are expected to be informed by the end of this week, as per the details of the internal memo.

PYPL was up 0.3% on Tuesday.

As of the end of 2022, PayPal’s workforce numbered close to 29,900. This new round of layoffs, affecting roughly 2,500 employees, follows a similar reduction initiated in January of the previous year.

The move will allow the financial service firm to “move with the speed needed to deliver for our customers and drive profitable growth,” Chriss noted in the letter.

“At the same time, we will continue to invest in areas of the business we believe will create and accelerate growth.”

It follows a challenging period for the San Jose, California-based company, whose shares have plummeted over 20% over the past year amid weaker earnings and PayPal’s revision of its forecast for the full-year adjusted operating margin.

Chriss was appointed last year as the company’s CEO to replace Dan Schulman.

During PayPal’s Q3 earnings call, Chriss highlighted the challenges posed by the company’s current “cost base and complex structure.”

Since assuming the top role, the 46-year-old has initiated significant changes in the firm’s management structure to streamline the business which became notably bloated during the pandemic.