Global online payments corporation PayPal announced it will be reducing its workforce by 7%. This will see approximately 2,000 people lose their jobs. The decision was made due to the ongoing economic slowdown, adding to the list of financial technology companies, and other tech companies across the world that have been affected.
The company’s decision to reduce expenses is happening in the midst of elevated inflation and the possibility of an upcoming recession, which is affecting consumers’ buying power.
Towards the end of 2022, PayPal revised its annual revenue growth projection downwards in response to a predicted wider economic decline. The company stated that it didn’t anticipate substantial growth in its US e-commerce sector during the holiday quarter. Executives explained that due to the difficult macroeconomic situation and slowing e-commerce trends, they needed to be cautious with their projections.
“We will treat our departing colleagues with the utmost respect and empathy, provide them with generous packages, engage in consultation where required, and support them with their transitions,” PayPal’s Chief Executive Dan Schulman. “I want to express my personal appreciation for the meaningful contributions they have made to PayPal.”
PayPal is now among the numerous tech firms that have announced job cuts in recent months. In January 2023, Google announced its intention to eliminate 12,000 jobs, equivalent to roughly 6% of its worldwide workforce. Prior to that, Microsoft revealed plans to reduce its workforce by 10,000.
Locally, things have been heading in the same direction as well. Towards the end of 2022, local tech companies, including e-hotel firm Kune and electric e-taxi firm Nopea ride closed shop. E-commerce platform Copia has since lost about 50 of its employees in layoffs, and so did Twiga Foods, whose layoffs affected 21 percent of the staff, which is about 210 employees.