American multinational financial technology company operating an online payments system, PayPal, has announced plans to eliminate 9% of its global workforce, which is about 2,500 jobs.
The cuts will affect both existing roles and job listings that PayPal had planned to hire for and will take place over the course of the year.
In an internal letter to employees, the company’s CEO Alex Chriss wrote that the job cuts were necessitated to drive more focus and efficiency, and also to reduce complexity and duplication.
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Part of the letter reads,
“While I have been encouraged by the innovation our team is delivering, we must execute faster and ensure we are focused on solving our customer’s most critical needs and problems. Specifically, across our organization, I need to drive more focus and efficiency, deploy automation, and consolidate our technology to reduce complexity and duplication. We have started on that journey, but there is a lot of work to do, and 2024 marks a year of change, including some difficult but necessary decisions to get us to where we need to go.
“Today, I am writing to share the difficult news that we will be reducing our global workforce by approximately 9% through both direct reductions and the elimination of open roles over the course of the year. We are doing this to right-size our business, allowing us to 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.”
PayPal’s layoffs are happening despite the company’s strong growth throughout 2023. The company’s revenue as of September 2023 was $7.42 billion an increase of more than eight percent compared to its revenue a year before. It beat earnings expectations and reported a “double-digit growth” in the number of transactions that happened over its platform.
The Information noted that Chriss, who took over as the company’s CEO in September 2023, said in PayPal’s last earnings call in November 2023 that its costs were “too high” and were slowing the company down.
Also, PayPal’s 9% cut of its global workforce is coming after the company last week, introduced six new artificial intelligence (AI)-based customer engagement solutions.
According to PayPal, the integration of AI features will reduce latency by as much as 50% and enable customers to check out twice as fast, with the same level of security. Also, the new login solution will leverage AI to get smarter and faster over time.