Status: 02/01/2023 10:04 a.m
The online payment service PayPal has announced that seven percent of the workforce will be laid off – almost 2,000 employees. The company joins the long list of large tech companies that have announced job cuts.
The American online payment service PayPal has announced that around seven percent of its employees will be laid off. This corresponds to around 2000 full-time employees. The company justified the step with a challenging business environment. The California-based company said the layoffs would be spread over several weeks. Some areas would be more affected than others – PayPal is the parent company of brands like Venmo, Xoom and Honey.
PayPal CEO Dan Schulman justified the job cuts as a cost-cutting measure. “While we have made significant progress in streamlining our cost structure and focusing our resources on our core strategic priorities, much remains to be done,” Schulman said in a statement. The company’s value on the stock exchange has halved within a year.
Difficult macroeconomic environment
In November, PayPal lowered its annual revenue growth forecast in anticipation of a broader economic downturn and said it didn’t expect much growth from its U.S. e-commerce business in the holiday quarter. Company executives said at the time that a difficult macroeconomic environment and slowing e-commerce trends forced the company to issue cautious guidance.
Series of layoffs in the tech sector
This is the latest case of widespread layoffs at a tech company. A number of companies – including Facebook’s parent company Meta, Amazon, Microsoft, Twitter and Alphabet – have decided on large rounds of layoffs in recent weeks and months. They are trying to cut costs and weather the downturn. The site Layoffs.fyi, which tracks layoffs in the tech industry, currently lists 241 tech companies worldwide that have laid off around 78,000 employees since the beginning of the year alone.
In recent years, the industry has created thousands of jobs to deal with rapid growth and optimistic projections during the pandemic. The Windows provider Microsoft has increased its workforce by more than 75,000 employees to 221,000 since 2019. From 2019 to the end of 2021, the Facebook parent company Meta gained more than 27,000 employees, and Amazon’s number of employees more than doubled in the same period to 1.6 million employees worldwide at the end of 2021. The tech industry assumed that growth would continue before it came to an abrupt end. Companies are now adapting to the changing environment, including with layoffs.