PayPal will lay off 2,000 employees to cut costs amid economic downturn

PayPal Holdings said on Tuesday that it is planning to cut 7% of its workforce, or about 2,000 employees, the latest in a list of fintech companies affected by the economic downturn.

The payments firm also joins tech giants and Wall Street giants who are rolling out layoffs across corporate America as companies seek to rein in costs. to weather the recession.

PayPalThe move to tighten US cost controls comes as decades of high inflation affect the purchasing power of consumers, who also face the threat of a looming recession.

PayPal CEO Dan Schulman said: “While we have made significant progress in aligning our cost structure and focusing resources on our core strategic priorities, , but we still have a lot of work to do.” declare.

Shares of the payments company, which lost about 60% of its value last year, rose about 2% in afternoon trading.

“Like other tech companies, PayPal is looking to position its finances and strategy, preparing for a recession,” said Moshe Katri, an analyst at Wedbush.

Thomas Hayes, president and managing member of the investment firm Great Hill Capital, told Reuters that “technology that is over-hired during the pandemic and streamlining staff during difficult times will help them stay afloat.” maintain profits when conditions recover.”

In November, PayPal cut its annual revenue growth forecast in anticipation of a broader recession and said it did not expect much growth in its U.S. e-commerce business in the coming months. holiday quarter.

The company’s executives said at the time that the challenging macro environment and slowing e-commerce trends had prompted them to be cautious with their forecasts.

© Thomson Reuters 2023

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