What just happened? PayPal has become the latest in a long line of tech companies to announce massive job cuts. The payments giant is reducing its global workforce by 9%, which equates to around 2,500 jobs. The news comes almost exactly a year after PayPal laid off 2,000 people, or about 7% of its total number of employees.
President and CEO Alex Chriss, who was appointed head of PayPal in September, gave staff the bad news on Tuesday. In a memo titled Preparing for the Future, Chriss talked about driving focus and efficiency, deploying automation, and consolidating technology.
The mention of deploying automation is interesting, given that Chriss said in his first major announcement last week that AI will play a big part in new innovations to revolutionize commerce. The technology will be applied to PayPal checkout and become part of Smart Receipts, which will send customers a receipt that can track their purchase and predict what they might want to buy next from that merchant.
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Chriss said that the layoffs were necessary to "right-size" PayPal, "allowing us to move with the speed needed to deliver for our customers and drive profitable growth."
The cuts will come from current positions and the elimination of open roles over the course of the year. Those impacted will be notified by the end of the week. Chriss said PayPal will support employees' transitions with the utmost respect, support, and compassion.
Amid increasing competition from rivals, PayPal has seen its share price fall 20% over the last 12 months. The company's first earnings report under Chriss beat analysts' expectations, suggesting he might be on the path to reversing PayPal's fortunes.
There was a huge number of job cuts across the tech industry last year, with 1,188 companies laying off 262,595 employees across all of 2023, according to tracker Layoffs.fyi. The trend has continued into 2024: We've just ended the year's first month and already 104 firms have laid off 28,970 people. At this rate, more people could lose their jobs this year than in the previous 12 months.
Some of the big names to let workers go recently include Microsoft, Amazon, Twitch, Duolingo, UPS, eBay, and many more. Google CEO Sundar Pichai has warned staff to prepare for more job cuts in 2024 after the company eliminated hundreds of jobs across its hardware, assistant and engineering teams.
