US-based payments giant PayPal Holdings has made a decision that is likely to disappoint its employees. The company is laying off 2,500 employees, representing 9% of its global workforce.
Notably, the layoff decision is in line with its strategy to 'right-size' the business and increase its focus on automation.
CEO explains the reason for layoffs
CEO Alex Chriss explained that these layoffs are essential for PayPal to adapt to the current market demands and operate more efficiently. The company is facing stiff competition from rivals like Apple, Zelle, and Block, leading to diminished growth in its branded products.
“Today, I am writing to share the difficult news that we will be reducing our global workforce by approximately 9 per cent through both direct reductions and the elimination of open roles over the course of the year," Chriss stated.
"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," the CEO added.
Impact of layoffs across the tech industry
The move by PayPal is part of a broader trend in the tech industry, where companies like Meta, Amazon, Google, and Microsoft have collectively laid off over 28,900 employees in January 2024 alone.
The tech sector saw approximately 260,000 job cuts in 2023, indicating a significant shift in the industry's employment landscape.
Not only in the United States but also in India, layoffs are being observed among tech companies and startups. A recent report by ET indicated that Wipro is likely to lay off hundreds of employees in an effort to improve its profit margins.
PayPal's previous layoffs
The current round of layoffs isn't new. PayPal had previously reduced its workforce by 2,000 employees in early 2023.
PayPal said the affected employees will be notified by the end of the week about their job termination. While focusing on automation and reducing complexity, CEO Chriss said the company will continue investing in areas that will create and drive growth.
Join our new WhatsApp Channel for the latest startup news updates