May had turned out to be a rough month for the tech sector employment. Tech companies have laid-off 15,000 tech workers during last month. Similarly, PayPal is among the latest companies decided to reduce their workforce. The company has started laying off their risk management and operations employees. Earlier, PayPal laid-off more than 80 employees at their San Jose headquarters.
Slower growth in earnings
The payments company has laid off dozens of staff members in Chicago, Nebraska and Arizona. PayPal have witnessed slower growth in earnings during the first quarter of 2022. In the first quarter of the year, spending on the platform increased by 15 percent to $323 billion. This the lowest growth for the last five years. “PayPal is constantly evaluating how we work to ensure we are prepared to meet the needs of our customers and operate with the best structure and processes to support our strategic business priorities as we continue to grow and evolve.” PayPal said in their official statement.
PayPal to save $260 million per year
PayPal’s headcount has climbed in recent years and the firm ended last year with 30,900 employees. This is 33% higher than the pre-pandemic levels. Currently, PayPal approved plans for a “strategic reduction of the existing global workforce” in 2020. Therefore, the company has spent $20 million to reduce their existing workforce. Mostly, this will cover severance and employee benefits. However, the reduction in workforce will save $260 million a year for PayPal. Moreover, the company expects to spend $100 million more on restructuring.
“The company is constantly evaluating how we work to ensure we are prepared to meet the needs of our customers and operate with the best structure and processes to support our strategic business priorities as we continue to grow and evolve.” PayPal told Bloomberg in a statement.
In addition, Microsoft, Meta and NVIDIA are also planning to limit their hiring amid slowing sales and revenue growth.
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