Tech employees just can't catch a break in 2023, as the layoffs continue with PayPal axing 2,000 employees in the face of “the challenging macro-economic environment.”
The news certainly isn't surprising considering the tech industry has been on a tear lately, laying off tens of thousands of employees in some cases like Google and Microsoft. PayPal is just following suit and shoring up costs for the coming recession.
Still, PayPal cuts point to a large trend in the ecommerce industry that could have far-reaching ramifications for all businesses.
PayPal Cuts 7% of Workforce
In a statement by PayPal CEO Dan Schulman, the digital payment company announced that it would be cutting 7% of its workforce, which amounts to approximately 2,000 employees. The move comes with tech companies slashing budgets and laying off employees left and right, but luckily the CEOs are getting really good at making statements about them.
“Change can be difficult – particularly when it includes valued colleagues and friends departing. We will face this head-on together, drawing on the unparalleled scale of our global platform, the strategic investments we have made to strengthen our core capabilities, and the trust and loyalty of our customers.” – Dan Schulman, CEO of PayPal
Schulman joins a long list of CEOs that have taken responsibility for over-hiring in the economic upswing that took place once vaccinations became available and the worst days of the pandemic had subsided. Still, tech employees likely don't take much solace from these kind words, even if PayPal does “provide them with generous packages” as severance.
What Does This Mean for Ecommerce?
While the PayPal cuts may seem like just another drop in the bucket of tech layoffs over the last few months, it does point to some notable economic and more specifically ecommerce trends that could impact a wide range of businesses.
For one, economic experts note that PayPal isn't out of the woods yet, given the company has struggled to compensate for the lack of ecommerce spending due to the economic downturn. Simply put, people aren't spending money online, so they aren't using PayPal nearly as much as they used to.
Considering Schulman specifically noted that PayPal has “more work to do” when it comes to “right-sizing [their] cost structure,” it's safe to assume that ecommerce isn't going to rebound anytime soon, so if you rely on that kind of income, your business should be prepared for it as much as possible.