This was disclosed by the firm CEO Alex Chriss, in a letter
to the staff of Paypal on Tuesday.
According to the newly appointed CEO, 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 also posted the letter to its website after
market close. Paypal’s shares ended the day down 0.13%.
In November, Chriss said he expects 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 (AAPL.O), opens new tab.
Investors hope Chriss, who was previously a senior executive
at software company Intuit (INTU.O), opens new tab, will revive PayPal’s stock.
It fell 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.
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