Paypal cutting 2,500 jobs as rivals snag share Consumer sentiment lifts to 2-year high

Paypal Holdings will reduce its workforce by about 9% as Chief Executive Officer Alex Chriss, who took over in September, grapples with rising competition, profit pressures and a raft of analyst downgrades.

In a letter to staff on Tuesday, Chriss said the decision was made to “right-size” the company through both direct cuts and the elimination of open roles throughout the year. Affected staff will be notified by the end of the week, according to the letter, which was seen by Bloomberg News.

Paypal, which employed about 29,900 workers at the end of 2022, announced a similar round of cuts last January. The latest move will affect about 2,500 workers.

Eliminating jobs will allow the firm to “move with the speed needed to deliver for our customers and drive profitable growth,” Chriss said in the letter. “At the same time, we will continue to invest in areas of the business we believe will create and accelerate growth.”

Paypal was an early disrupter in the payments industry, but rivals including Apple Inc. and Zelle have since crowded the space, leaving Paypal struggling to keep pace. At least four analysts downgraded the stock this month, citing a range of concerns from rising competition to pressure on profitability.

American consumers, fresh off strong holiday spending, are feeling more confident than they have in two years.

The Conference Board, a business research group, said Tuesday that its consumer confidence index rose for the third consecutive month, to 114.8 in January from 108 in December.

January’s reading came in just slightly higher than the 114 that analysts were expecting. The index is at its highest level since December of 2021.

Consumer spending accounts for about 70% of U.S. economic activity, so economists pay close attention to consumer behavior as they take measure of the broader economy.

“January’s increase in consumer confidence likely reflected slower inflation, anticipation of lower interest rates ahead and generally favorable employment conditions as companies continue to hoard labor,” Dana Peterson, chief economist at the Conference Board, said in a statement.