PayPal (NASDAQ:PYPL), a top payments Fintech that also includes Venmo, is letting go around 9% of its workforce or approximately 2500 individuals according to multiple reports.
CNBC said that PayPal CEO Alex Criss distributed an internal memo indicating the exits will take place throughout the year and they include pending hires. Criss was quoted in the document:
“Across our organization, we need to drive more focus and efficiency, deploy automation, and consolidate our technology to reduce complexity and duplication,” and they will “continue to invest in areas of the business we believe will create and accelerate growth.”
Block (NASDAQ:SQ), another payments and blockchain focused Fintech, was said to be cutting jobs to hit a 12,000 employee headcount cap. This would impact both its Cash App and Square segments of its business.
WSJ.com said the job cuts were announced by CEO Jack Dorsey today in an employee communication. The reduction will take place throughout the year with reports uncertain as to how many employees were let go today.
Shares in PayPal were little changed for the day. Block shares hovered as well in a flat market day during a big week of tech earnings and a Fed meeting.
Tech layoffs are nothing new in the current economic environment – especially in the Fintech sector. The gangbuster days of the past turned into solemn introspection as the economy sagged and firms focused more on profits than growth. Competition in Fintech is pretty intense too – especially in the hot payments sector which has been one of the most successful sectors of Fintech.