PayPal CEO has noted that the 2000 job cuts should have helped the company save $900 million last year and at least an additional $1.3 billion in 2023.
PayPal Holdings Inc (NASDAQ: PYPL), through its President and CEO Dan Schulman, has announced plans to lay off 2000 global full-time employees, representing approximately 7 percent of its workforce. According to a letter sent to employees by Schulman, PayPal is facing challenging macroeconomic factors that require hard decisions including reducing the workforce. The company has announced that some departments will be more affected than others during the job cuts in the coming weeks.
Following the announcement, PayPal shares closed January trading at $81.49, up approximately 14.42 percent during the month. Nonetheless, PYPL shares have not fully recovered from last year’s descent of about 53.65 percent. From a technical standpoint, PayPal shares are ready to take off and perhaps form a new ATH.
Notably, PYPL shares have formed a double bottom with a rising RSI divergence on the weekly time frame. Moreover, 48 ratings surveyed by MarketWatch have PYPL shares an average rating of Over and an average price target of $102.13.
The rising narrative may be supported by reduced expenses from the recent job cuts. Furthermore, the payment giant will be able to focus on areas that have high returns and activity. Meanwhile, the company has vowed to help the affected employees transition smoothly with a handsome package.
“These reductions will occur over the coming weeks, with some organizations impacted more than others. 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,” Schulman noted in the letter.
PayPal and the Market Outlook amid News on Employees Lay-Off
PayPal CEO has noted that the 2000 job cuts should have helped the company save $900 million last year and at least an additional $1.3 billion in 2023. Furthermore, competition in the payment industry, particularly global remittance, has significantly increased with the boom of Web3 platforms powered by blockchain technology. Additionally, the fears of a possible global recession have made several tech companies cut spending significantly in the past few months.
“We’re operating in an environment where we think we’re going to continue to have inflationary pressures, where real wage growth is going to continue to be negative for a period of time, where discretionary spend will be under pressure,” PayPal’s CFO Gabrielle Rabinovich recently noted.
During the third quarterly earnings, PayPal beat analysts’ expectations. However, the company’s fourth-quarter earnings estimate came below analysts’ expectations. The company is not secluded in the job cuts as many others have moved in a similar direction.
Earlier this month, Google LLC announced plans to lay off more than 12,000 workers, Microsoft Corporation (NASDAQ: MSFT) announced plans to cut 10,000 employees and Salesforce Inc (NYSE: CRM) announced plans to lay off 7,000 workers.
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