PayPal will be cutting 7% of its workforce due to the macroeconomic slowdown that the company has been experiencing for the past quarters. The layoffs will affect 2,000 employees and will take place in the next few weeks.
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SAN JOSE, CA - APRIL 09: A sign is posted outside of the PayPal headquarters on April 9, 2018 in San Jose, California. PayPal is looking to offer basic banking services including Federal Deposit Insurance Corp. insurance for customer balances, a debit card and direct-deposit.
Laying Off 2,000 Employees
PayPal becomes the latest tech company to join the roster of big tech companies and wall street titans to lay off employees in these trying times. In a report from Bloomberg, the cut will affect 2,000 employees, which equates to 7% of its total workforce.
President and Chief Executive Officer Dan Schulman confirmed the news and said that this will be conducted in the coming weeks. He commends the employees for the meaningful contributions that they have made to the company during their stay.
"We will treat our departing colleagues with the utmost respect and empathy, provide them with generous packages, engage in consultation where required and support them with their transitions," he added.
Executives of the company will be sharing the specific impacts within the business units and teams of the company the next few weeks, where the employees can also communicate regularly and openly.
While this move is challenging, Schulman stated in his announcement that he remains confident that they will get through this with compassion for one another, values at the fore, and commitment to the company's future.
Cost Reduction
This move from the company is an effort to reduce costs against increasing inflation. The stocks of PayPal also experienced a slowdown in payments volume on its platform after the post-pandemic began. Because of this, the company promised to reduce expenses by laying off employees and shutting down offices across the country.
These efforts will help the company to obtain $900 million in savings last year and an additional $1.3 billion in 2023. Schulman has always been vocal regarding his plans to enhance the operations of the company and to rapidly grow its revenue rather than expenses.
In its third quarter, CNBC reported that PayPal beat on earnings and revenue expectations. However, shares have dropped after reporting the company's fourth quarter revenue that came in behind analysts' estimates.
Chief Financial Officer Gabrielle Rabinovich shared during the earnings report regarding PayPal's expectations for 2023. This includes continuing to have inflationary pressures, navigating the environment, and considering the range of outcomes on volume and revenue growth.
Also Read: Paypal to Start Supporting Crypto Transactions With MetaMask Wallet
Other Layoffs
PayPal joins other tech companies in the industry to conduct mass layoffs. In a report from Engadget, Google also disclosed plans to layoff 6% of its global workforce, affecting 12,000 employees. Microsoft would also cut 10,000 jobs in the near future. Both companies announced this earlier this month.
Google, Microsoft, and PayPal all blamed the "challenging macroeconomic environment" where these companies find themselves recently.
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