It’s not good to be a PayPal employee in the United States. The American online payment giant continues to reduce its workforce through a new wave of layoffs reported this week by Bloomberg (via Engadget). These new job cuts follow a series of layoffs previously conducted by PayPal in Chicago (Illinois), Omaha (in Nebraska), but also in Chandler (Arizona). And as Engadget points out, the group had also permanently pushed 80 employees out of its headquarters in San Jose (California).
A less favorable economic climate… and slowing growth
Although provided for in a strategic plan presented in 2020, these job cuts come in a rather delicate context for PayPal, which is also suffering from a less favorable economic situation for its activities. The firm’s latest financial report thus revealed figures that were far from spectacular, marked by objectives met with accuracy and a net profit twice lower than that observed a year earlier. This same balance sheet also showed spending up 15%, all adorned with growth beginning to slow down. A first in five years according to Engadget.
Spain invests heavily in semiconductor production
Overall, several factors explain these disappointing results, starting with the shortages that continue to affect the world of electronics, among others. The war in Ukraine, the resulting economic crisis, but also the return of in-store sales (following the end of certain health restrictions) are also to be weighed in the balance.
Either way, these downsizing has already cost PayPal nearly $100 million in severance pay alone. A substantial budget, which risks being revised upwards, but which PayPal sees as a good investment. By parting with part of its workforce, the group hopes to save a total of 260 million dollars per year.
A strategy also adopted by other Tech giants. In recent months, Nvidia, Microsoft and even Meta have announced that they want to limit their recruitment to better cope with their respective declines in income. We also know that the VTC applications Uber and Lyft are also on this same line.