PayPal Holdings is said to be reducing its workforce by around 9%, as Chief Executive Officer (CEO) Alex Chriss attempts to combat rising competition, profit pressures, and analyst downgrades.
In an internal letter sent to staff, Chriss noted the decision was made to “right-size” the company through direct cuts, and the elimination of open roles throughout the year.
Staff affected will be notified come the end of the week.
The company employed around 29,900 staff towards the end of 2022, and announced a similar layoff round last January.
This latest round is expected to cut around 2,500 jobs.
Chriss claimed in the letter that cutting jobs will allow the company 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 shares have plummeted over 20% over the last year, with earnings faltering and the company lowering its full-year guidance for adjusted operating margin.
The company was one of the first in the industry, however, now Apple Inc. and Zelle are climbing, leaving PayPal struggling to keep up.
A minimum of four analysts have downgraded its stock this month, bringing forth concerns of rising competition and profit pressure.
On the company’s third quarter earnings, Chriss said the “cost base and complex structure” had slowed progress, which is an issue he plans to address. Fourth quarter results are expected to be revealed next week.
“There hasn’t been a lot to celebrate” over the last few years.
