PayPal has announced its latest plans to reduce its workforce by another 2,500 employees, constituting 9% of its global staff, just a year after a similar downsizing move. This move comes as PayPal contends with heightened competition from rivals like Apple, Zelle, and Block.
CEO Alex Chriss explained to employees that this decision aims to “right-size” the company by implementing both direct staff reductions and removing all of the currently open positions.
Those employees who are affected by the direct job cuts will be informed by the end of the week, according to the digital payments giant.
Alex Chriss, who was appointed from software company Intuit last year to lead PayPal’s turnaround efforts, is under pressure from investors to boost the company’s share price, which has declined by over 20% in the past year.
Despite reporting better-than-expected earnings in November under Chriss’s leadership, PayPal continues to face challenges in a very competitive current climate.
In a bid to adapt and innovate, PayPal recently launched new artificial intelligence-driven products and a one-click checkout feature.
However, the company’s decision to cut jobs aligns with a broader trend in the technology industry, where various giants, including Meta, Amazon, Microsoft, Google, TikTok, Salesforce, and now Block, have collectively announced over 25,000 job cuts in the last month.
The ongoing trend of job cuts in the tech sector, with more than 260,000 jobs lost in the previous year, is attributed to factors such as the pandemic’s impact on hiring and high inflation leading to weakened consumer demand.
In the last few years, many tech companies have seen lower demand. For example, Alphabet and Microsoft, two of the largest firms, recently reported that their sales figures had slowed down due to growing fears about the economic conditions.
Following recent challenges in the global economy, consumers and enterprises worldwide are reducing their expenditures. The persistent increase in inflation has led to elevated interest rates and a surge in prices across various goods, impacting sales adversely.
Additionally, the strength of the US dollar poses challenges for American businesses, making it more expensive to market products internationally.
