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PayPal announced plans to lay off about 2,000 employees, reducing its global workforce by 7 per cent, as it became the latest technology group to cut costs ahead of an expected slowdown.
The payments group said it needed to take further action to address “the challenging macroeconomic environment” amid fears of a recession. Shares in PayPal rose 2.3 per cent, or $1.85, to close at $81.49 in New York last night.
Dan Schulman, the chief executive, said jobs would be cut “over the coming weeks” and thanked departing staff for their “meaningful contributions”.
“While we have made substantial progress in ‘right-sizing’ our cost structure, and focused our resources on our core strategic priorities, we have more work to do,” Schulman, 65, said in an email to employees. “We must continue to change as our world, our customers and our competitive landscape evolve. Addressing these changes requires us to make hard decisions that will impact some of our colleagues.”
PayPal, founded as Confinity in 1998, rapidly became a leader in online payments. The group is based in San Jose, California. Today it is available in more than 200 countries, with more than 325 million accounts. Its architects, including founders Peter Thiel and Max Levchin, and Elon Musk, whose X.com merged with Confinity in 2000, later became some of Silicon Valley’s most influential entrepreneurs.
Shares in PayPal tripled in the early stages of the pandemic as lockdowns and coronavirus restrictions prompted a boom in digital retailing. All these gains have since been reversed, however, as ecommerce demand weakened and economic concerns mounted. “Change can be difficult — particularly when it includes valued colleagues and friends departing,” Schulman wrote.
Technology companies have moved swiftly to reduce their workforces this year. So far in 2023, the international tech sector has seen 77,916 layoffs, according to Layoffs.fyi, a tracker website. It recorded 159,684 during last year.
Amazon is losing more than 18,000 employees; Meta Platforms, owner of Facebook, Instagram and WhatsApp, has shed more than 11,000; Alphabet, the parent company of Google and YouTube, is cutting 12,000; and Microsoft is reducing its workforce by 10,000.