As spending slows on PayPal’s platform, the company has started cost cutting, starting with staff wages.

The company has laid off dozens of workers in its risk management and operations sectors this week, as well as announcing plans to fire more than 80 staffers in its San Jose headquarters.

This comes after spending through PayPal climbed just 15 per cent in the first quarter to A$455 billion, the smallest increase in over five years.

Supply chain woes as well as eBay’s move away from the payments platform has led to this slowdown.

“PayPal is constantly evaluating how we work to ensure we are prepared to meet the needs of our customers and operate with the best structure and processes to support our strategic business priorities as we continue to grow and evolve,” PayPal said in a statement.

PayPal’s workforce ballooned during the early days of the pandemic, when online shopping boomed. Staff increased 33 per cent from pre-pandemic levels, ending 2021 with 30,900 employees.

Counterintuitively, firing staff can be a costly exercise. The company spent US$20 million on severance and employee benefits during the first quarter. The “strategic reduction of the existing global workforce” and restructuring will cost an additional US$100 million this year, but reduce overall costs by US$260 million a year.

“We are continuing to review our facility needs due to our new work models,” PayPal said.

“The strategic actions and cash payments associated with this plan are expected to be substantially completed by the fourth quarter of 2022.”