PayPal adds another round of layoffs

PayPal, the digital payments firm, is reducing its workforce by 251 employees at its San Jose offices, as part of a multiyear restructuring plan spearheaded by CEO Enrique Lores. The cuts aim to turn around the company's performance, cut costs and invest more in artificial intelligence. Over the next two to three years, PayPal intends to eliminate 20% of its total workforce, amounting to over 4,500 jobs and saving around $1.5 billion in expenses, according to Bloomberg.

In the second quarter, PayPal reported a net loss of $1.26 billion, a 12% decline from the same period last year. The company's shares have fallen more than 15% in the past 12 months, currently trading at approximately $55. Challenges facing PayPal include a slowdown in its branded checkout feature and increased competition from rivals such as Apple Pay and Google Pay.

This slowdown is partly attributed to the "K-shaped economy," where higher-income individuals see their incomes rise while lower-income individuals face financial struggles, affecting the demand for PayPal's services. PayPal's efforts to improve branded checkout are supported by a $400 million investment this year. The company has also faced criticism over the pace and effectiveness of change over the past two years, leading to the departure of its previous CEO, who failed to meet the board's expectations.

Despite challenges, PayPal has seen growth in other areas, such as its popular Venmo platform and a Buy Now, Pay Later service. Earlier this year, financial services giant Stripe and private equity firm Advent International made a bid for PayPal valued at over $50 billion, but reportedly abandoned their pursuit. The tech industry is experiencing a wave of layoffs as companies prioritize investments in artificial intelligence.

Recent layoff announcements by tech giants like Apple, Meta, Snap, Block, Oracle, and Amazon highlight the trend. According to a June report by Challenger, Gray & Christmas, U.S. technology companies announced 123,653 cuts from January to May, a 66% increase compared to the same period in 2025.