PayPal is financially in pain due to the company's increased spending.
The payment processor has recently been reported to have reduced its workforce in its various offices to cut spending expenses and facilitate growth, per Engadget.
A picture of PayPal's headquarters in San Jose, California.
The company saw record growth and profits during the onset of the COVID-19 pandemic when people were using digital payment services prominently due to being stuck at home, according to Reuters.
PayPal Lay Off Details
According to Bloomberg's article, sources familiar with Paypal's inner workings revealed that the company has been laying off workers in risk management and operations this week, with this batch being the latest in the company's series of layoffs.
The sources also revealed that PayPal has already reduced its workforce in its offices in Chicago, Omaha, Nebraska, and Chandler, Arizona. Meanwhile, the company previously announced that it would permanently let go of more than 80 people in its headquarters in San Jose, California.
The sources asked Bloomberg not to be named to protect their anonymity.
Paypal's growth during the onset of the pandemic allowed the company to hire more employees, ending with 30,900 hired people in the final days of 2021 - a 33% increase from pre-pandemic levels.
However, the increased labor force means the company would pay more people to work for them. As a result, the company found that its spending went up by 15% in the first quarter of 2022, equating to $323 billion. This rise in expenditures marks the company's smallest increase in at least five years due to supply chain disruptions that hindered e-commerce purchases and consumers' return to in-store shopping as public health protocols eased to facilitate economic recovery.
Paypal said in a statement that it is constantly evaluating how it works to ensure it is ready to meet the needs of its customers and operate at the best of its capabilities to support its strategic business priorities as it continues "growing and evolving."
To do so, the company approved strategic restructuring plans in 2020, paying a total of $100 million in severance pays to all of its laid-off employees and other expenses related to future job cuts and employee benefits.
PayPal didn't mention specific details about its severance pay and packages it offered to affected employees.
Despite the severance pays, PayPal is expected to save $260 million a year.
Will PayPal Hire People Again?
Although the payment processor has been laying off employees and plans to lay off 80 more at its headquarters, it mentioned that it continues hiring people working within the state.
"PayPal remains fully committed to the Bay Area and to California and we will continue to hire and invest in our business and people working within the state," a company spokesperson told Tech Crunch.
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