PayPal to cut 2,000 jobs as e-commerce slides from pandemic peak

PayPal will dismiss about 2,000 full-time employees, amounting to about 7% of the company's global workforce, CEO Dan Schuman said Tuesday. 

The reductions will come in the next few weeks, and while the cuts will affect the whole company, the layoffs will hit some PayPal departments harder than others, Schulman said in an announcement on the company's website. Employees were notified of the layoffs earlier on Tuesday. 

PayPal joins other fintechs that have recently announced layoffs including Stripe, which cut 14% of its workforce in November 2022; Plaid, which laid off 20% of its staff in December; and Bolt, which this month said it's laying off another 10% of its workforce, amounting to a 50% overall staff reduction since May 2022. 

David Paul Morris/Bloomberg

PayPal in recent quarters has signaled a slowdown in e-commerce volume after hitting a peak during the pandemic, when consumers were flush with cash. Credit-card issuers reported rising delinquencies during the fourth quarter as inflation began cutting into consumer spending.

Schulman foreshadowed trouble when announcing the company's third-quarter earnings in November 2022, when he told analysts PayPal was focused on cutting costs to offset a slowdown in e-commerce sales that portended a poor holiday sales outlook. 

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The San Jose, California-based company late last year pinned its hopes for growth on the advancement of its buy now/pay later financing options, which have been adopted by major merchants including Nordstrom. PayPal also has a partnership with Amazon enabling consumers to check out with Venmo.

"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 said in the note, adding that PayPal will provide laid-off employees with severance packages and assistance with job searches. 

PayPal will announce fourth-quarter and full-year 2022 earnings on Feb. 9.