FinTech company PayPal plans to lay off 2,000 employees

The beginning of 2023 witnessed the job loss of thousands of employees. Massive layoffs at tech companies have shown that even big tech giants like Amazon, Google and Microsoft are not immune to the challenges posed by the economic slowdown. Businesses are taking tougher steps to bail out costs and rein in spending amid stagnant or declining revenue gains. And after all the layoff chaos in January, another tech company has announced it will cut its workforce, continuing the layoff strike in February. FinTech company PayPal plans to lay off 2,000 employees.

Fintech firm PayPal Holdings announced Tuesday that it would lay off employees due to current economic challenges and cut 7 per cent of its workforce. The move parallels ongoing layoffs at big tech companies and Wall Street giants, which are reining in costs by cutting the workforce.

"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," said Dan Schulman, PayPal's Chief Executive, in a statement.

The layoffs will happen in the coming weeks, and team leaders will inform affected employees of the decision. PayPal will lay off employees in all departments, and some organizations will be hit harder than others.

"Over the next days and weeks, your leaders will share the specific impacts within your business units and teams. Our leadership team will communicate regularly and openly. This will be a challenging period for our community, but I am confident we will come through it together with compassion for each other, our values at the fore, and a shared commitment to the future of PayPal," Schulman further wrote in a memo to employees.

In particular, many company executives say that difficult times, the ongoing macroeconomic environment, and slowing trends in e-commerce have pushed the company to take such steps. The company has been battling post-pandemic inventory declines. The shock came after PayPal witnessed slower growth in payment volume on its platform. Also, like other tech giants, PayPal hired a spree during the pandemic as people started shopping online and opted for cashless payments.

Ongoing high inflation is high inflation that affects the purchasing power of consumers. The looming recession is stopping them from going with more purchases which led to pressure on PayPal's supply chain, and the company is struggling to keep up with revenue gains. In order to thrive through the current adverse situation, the Fintech company has decided to reduce its expenses by cutting jobs and even closing many offices.