Paypal is planning to cut about 2,500 jobs, or 9% of its global workforce, this year, according to its CEO, Alex Chriss.
In a letter to staff sent on Tuesday, the newly appointed CEO said the decision was made to “right-size” the company through both direct cuts and the elimination of open roles throughout the year. The staff that will be affected are expected to be notified by the end of the week.
“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,” Chriss wrote in the letter. The company did not immediately respond to a request for comment. Paypal’s shares were up 0.5% in late afternoon trading.
In November, Chriss said he expected to increase revenue outside of purely transaction-related volume and pledged to turn the fintech firm leaner by reducing its cost base. Though the announcement had helped rally the stock after third-quarter results, analysts have remained focused on PayPal’s margins in recent quarters.
The company’s low-margin business products have risen strongly, while growth in its branded products has slowed due to increased pressure from competitors such as Apple.
Investors hope that Chriss, who was previously a senior executive at the software company Intuit, will revive PayPal’s stock. It fell by nearly 14% last year and missed a broader sector-wide rebound in high-growth technology shares.
Last week, the payments firm announced it was launching new artificial intelligence-driven products as well as a one-click checkout feature.
Meanwhile, rival Block, led by the Twitter co-founder Jack Dorsey, also began to cut jobs this week as part of its previously disclosed plans to trim headcount and reduce costs.