The newly appointed CEO of PayPal, Alex Chriss, has revealed that the company is set to undergo a “right-sizing” process, involving a reduction of 2,500 jobs, equivalent to 9% of its workforce, throughout the year. Affected employees are expected to be notified by the end of the week.
Chriss explained the decision, stating, “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.”
In November, Chriss expressed optimism about increasing revenue beyond transaction-related volume, outlining plans to streamline the fintech firm by cutting operational costs. While this announcement had a positive impact on the stock following third-quarter results, analysts have consistently focused on scrutinising PayPal’s margins in subsequent quarters.
Despite significant growth in the company’s low-margin business products, sales of its branded products have slowed due to increased competition from companies like Apple.
Investors are hopeful that Chriss, a former senior executive at Intuit, will revive PayPal’s stock. However, the stock declined by almost 14% last year and failed to recover along with other high-growth technology shares.
Despite the job cuts, PayPal recently introduced new AI-driven products and a one-click checkout feature in its efforts to stay competitive in the market.