Payments company PayPal Holdings plans to reduce its workforce by about 2,500 jobs, constituting 9% of its global employees this year.
The decision, outlined in a letter from CEO Alex Chriss, aims to “right-size” the company by implementing direct cuts and eliminating open roles throughout the year. Affected staff members are anticipated to receive notifications by the week’s end.
“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,” Chriss wrote in the letter.
After the market closed, the company published the letter on its website. Paypal’s shares experienced a 0.13% decline by the end of the day.
In November, CEO Chriss expressed his anticipation of boosting revenue beyond transaction-related volume and committed to making the fintech firm more efficient by lowering its cost base.
While the announcement contributed to a stock rally following third-quarter results, analysts have consistently concentrated on PayPal’s margins in recent quarters.
The company’s low-margin business products have seen significant growth, but its branded products have experienced a slowdown, primarily due to heightened competition from rivals like Apple.
Investors are optimistic that Chriss, a former senior executive at Intuit, will revive PayPal’s stock, which declined almost 14% last year, missing out on a broader rebound in high-growth technology shares.
Last week, the payments firm unveiled new artificial intelligence-driven products and a one-click checkout feature.
In contrast, rival Block, under the leadership of Twitter co-founder Jack Dorsey, initiated job cuts this week as part of its previously revealed plans to reduce headcount and control costs, according to a source told Reuters.