PayPal announced today that it will lay off about 7% of its workforce, which equates to roughly 2000 jobs. The online payment service is the latest company in the tech sector to announce layoffs.
PayPal, like many other eCommerce companies, grew heavily at the start of the global pandemic. Stay at home programs boosted online sales and PayPal's business benefitted from the development as people started to make more purchases online. In some regions, stores had to close for a period of time.
PayPal increased the number of employees significantly in 2020 and 2021. Worldwide employee count rose to 30900 in 2021. The employee count was 16800 at the end of 2015 and 26500 at the end of 2020, the first year of the pandemic.
CEO Dan Schulman confirmed that layoffs would happen over the coming weeks and that PayPal would treat its "departing colleagues with the utmost respect and empathy, provide them with generous packages, engage in consultation where required" and would "support them with their transitions".
Schulman says that PayPal has made "significant progress in strengthening and reshaping" the company to "address the challenging macro-economic environment".
The high inflation, the war in the Ukraine, supply-chain woes, and uncertain economic conditions impact most companies. Not all of PayPal's economic issues are caused by external factors. Some of them are home-made. PayPal's strategic shift from user growth to user engagement in early 2022 ended the company's incentive programs to attract new users and reactivate existing users. User growth slowed down as a consequence and the company had to admit that its incentive systems were also abused.
PayPal's shares fell from an all-time high of $300.21 in July 2021 to $66.39 in the past year. The stock is down less than 1% today and trades at $80.91 at the time of writing.
About 39000 PayPal customer accounts were hacked in December 2022.
This year alone, Microsoft, Amazon, Alphabet, IBM and other tech companies announced major lay offs.
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