Online payment service provider PayPal will cut around 9% of its workforce, or just under 2,500 positions, a decision which stems in particular from automation and the reduction of duplication. The announcement was made in an internal letter from managing director Alex Chriss, posted on the group's website. It comes a year, almost to the day, after the launch of a first wave of layoffs, which affected 7% of staff, or 2,000 people, at the time. Some of the positions affected by the social plan unveiled on Tuesday January 30 were not filled and their elimination will not result in dismissal.
In the letter, Alex Chriss justified this reorganization by the need for PayPal to gain “efficiency” and “automate”, as well as “reduce complexity and duplication”. The group faces fierce competition in the online payments sector, notably from Google Pay and Apple Pay, which rely on groups incomparably larger and more diversified than PayPal. It is also experiencing the backlash of post-pandemic normalization, after having experienced euphoria in 2020 and 2021 thanks to the acceleration of online sales.
Investors have long been concerned about its margins, which are considered insufficient. In the third quarter of 2023, the last for which the group published its accounts, the operating margin contracted compared to the same period of the previous year. PayPal and eBay were part of the same group for 13 years after the acquisition of the first by the second in 2002. Since the split in 2015, PayPal has sought to reduce its dependence on the online commerce platform, but has not yet completely achieved it.
In electronic exchanges after the close of the New York Stock Exchange, PayPal lost 1.15%.