According to reports, people familiar with the matter revealed that PayPal began to lay off the risk management and operation departments this week, hoping to deal with the stagnant growth of users' spending on its platform in recent quarters and finally improve the company's profits. The company cut dozens of employees in its departments in Chicago, Omaha, Nebraska and Chandler, Arizona. Documents show that PayPal also announced the decision to permanently lay off more than 80 people at its headquarters in San Jose, California, this month.
The company said in a statement: "PayPal is always evaluating how to ensure that we are ready to meet customer needs and support our strategic business priorities with the best structure and processes, so as to continue to grow and Development. "
Due to the interruption of the supply chain hindering the development of e-commerce, and after the epidemic eased, more consumers returned to offline stores for shopping, users' spending on the PayPal platform increased by only 15% to $323 billion in the first quarter of this year, the lowest in five years. EBay, the company's former parent company, is also rapidly divesting from the PayPal platform.
PayPal's total number of employees has increased in recent years, reaching 30900 at the end of last year, an increase of 33% compared with that before the epidemic.
The company said last month that it was trying to increase operating leverage, that is, to improve the growth capacity of revenue relative to expenditure. Dan Schulman, CEO of the company, said PayPal began to simplify its operation mode before the epidemic, but the explosive growth of business volume in the early stage of the epidemic forced them to shelve the plan for the time being.
"Now we need to resume this work and uphold a new focus, vitality and mission." Shulman promised.
PayPal warned in regulatory documents that it generated $20 million related to restructuring in the first three months of this year after launching "strategic reduction of existing global employees". Most of these costs are related to severance pay and other employee benefits.
PayPal currently expects an additional $100 million in restructuring costs this year, but layoffs can help them save $260 million in employee related costs each year.
"We will continue to evaluate businesses based on the new working model." PayPal said in the document, "most of the strategic actions and cash payments related to this plan are expected to be completed in the fourth quarter of 2022."