The company laid off dozens of employees who worked in Chicago, Omaha, Nebraska and Chandler, Arizona. PayPal also this month announced plans to permanently lay off more than 80 people at its San Jose, California, headquarters.
“Paypal is constantly assessing how it operates to ensure that it is prepared to meet the needs of its customers and operate with the best structure and processes to support its strategic business priorities as it continues to grow and evolve,” the company said in a statement.
Spending across its platforms rose just 15% in the first quarter to $323 billion, the smallest increase in five years.
Supply chain disruptions have hampered e-commerce purchases. More consumers have also returned to in-store shopping as the epidemic subsides. In addition, eBay, the company’s previous parent company, has moved payments away from the PayPal platform.
The company’s headcount has surged in recent years to 30,900 at the end of last year, up 33% from pre-pandemic levels.
The company said last month that it was improving the ability to raise revenue faster than expenses.
The company began streamlining its operating model before the pandemic. But the surge in volumes across its platform in the early days of the outbreak forced it to put off that work.
Spending declines via PayPal platforms as the epidemic recedes
The company warned in a regulatory filing that it incurred $20 million in costs associated with the restructuring in the first three months of the year after it began the strategic reduction of its existing global workforce. She explained that most of the costs are related to termination and other employee benefits.
The company now expects to incur an additional $100 million in restructuring fees this year. But the job cuts help the company save about $260 million annually in employee-related costs.
“We continue to review our facility’s needs due to our new business models,” the company said. The strategic actions and cash payments associated with this plan are expected to be completed by the fourth quarter of 2022.
It is noteworthy that PayPal is not the only one, as many technology companies have reduced the number of employees or stopped hiring due to the economic slowdown.
Microsoft, Meta and Nvidia are limiting hiring due to lower stock prices and slowing sales and revenue growth. Uber and Lyft are also reducing hiring as part of cost-cutting measures.