PayPal lays off 2,500 employees, or about 9% of its global workforce

PayPal is laying off 2,500 employees, or about 7% of its workforce, amidst a surge in tech layoffs. The move by the payments giant reflects the broader impact of the global economic slowdown on fintech companies.

The news comes exactly a year after PayPal announced it was eliminating 7% of its workforce or 2,000 employees due to the “challenging macroeconomic environment,” adding that the company has made progress in focusing resources on core priorities and rightsizing its cost structure, but that there was more work to be done.

According to a report by CNBC, CEO Alex Chriss said in an internal letter to employees on Tuesday that these layoffs will impact both current positions and positions that PayPal had intended to fill, and the process will unfold gradually throughout the year. Affected employees can expect to receive notifications by the end of the week.

“Across our organization, we need to drive more focus and efficiency, deploy automation, and consolidate our technology to reduce complexity and duplication,” Chriss wrote in the memo, adding that PayPal will “continue to invest in areas of the business we believe will create and accelerate growth.”

The layoff represents a broader trend of job cuts in the tech industry as companies turn to AI to improve efficiency.Just last week, PayPal unveiled its plans to integrate artificial intelligence features, signaling a significant move under the leadership of Chriss, who took the helm as CEO in September following his tenure at Intuit, the company known for TurboTax.

These AI enhancements encompass a swifter checkout process, AI-driven suggestions for merchants tailored to customers, and a comprehensive makeover of the consumer app. Chriss described this initiative as the inception of PayPal’s “next chapter.”

Below is full memo Chriss sent to all employees:

Team,

In our last Global All Hands, I shared that to build a growth organization and unlock our true potential, we need to be honest about how we can improve. During the last few months, I have spent as much time as possible with as many of you as possible to learn about our company’s great strengths, as well as where we need to move faster, where we need to change, and what we need to do to instill a culture of innovation that returns our company to the true position of strength it deserves.

Today, I am writing to share the difficult news that we will be reducing our global workforce by approximately 9% through both direct reductions and the elimination of open roles over the course of the year. 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. At the same time, we will continue to invest in areas of the business we believe will create and accelerate growth.

If your role is included in this workforce reduction, you will be notified between today and the end of the week. These decisions were not easy to make, and we are undertaking these actions with tremendous care and consideration. All decisions are subject to consultation, where required by law. True to our values, we will support our employees’ transitions with the utmost respect, support, and compassion.

PayPal has significant potential to create substantial value for our employees, our customers, and shareholders. Over the next year, we will work together to maximize our reach, scale, and resources, so that we can have an even greater impact for the customers we serve.

I am confident that our PayPal community will come through this period even stronger, and I am optimistic about the future we will create together.

Alex