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Business News/ Companies / News/  Layoffs in 2024: PayPal cuts 2,500 jobs, UPS to let go of 12,000 employees

Layoffs in 2024: PayPal cuts 2,500 jobs, UPS to let go of 12,000 employees

Payment platform PayPal is planning to cut around 2,500 jobs while United Parcel Service Inc (UPS) has also announced to let go of 12,000 employees.

UPS and PayPal announced major job cuts on January 30 (MINT_PRINT)Premium
UPS and PayPal announced major job cuts on January 30 (MINT_PRINT)

Payments firm PayPal Holdings is mulling over cutting about 2,500 jobs, or 9% of its global workforce, in 2024. The plan was revealed in a letter from CEO Alex Chriss on January 30. Meanwhile, United Parcel Service Inc (UPS) also announced the layoff of 12,000 jobs, according to a report by Bloomberg. UPS has explored the sale of its Coyote truck brokerage business in moves CEO Carol Tomé is taking to offset soft demand and higher union labour costs.

“Today, I am writing to share the difficult news that we will be reducing our global workforce by approximately 9 per cent through both direct reductions and the elimination of open roles over the course of the year," Chriss said in an official announcement.

"We are doing this to right-size our business, allowing us to move with the speed needed to deliver for our customers and drive profitable growth. At the same time, we will continue to invest in areas of the business we believe will create and accelerate growth," he added.

“2023 was a unique and difficult year," Tomé said in his statement. “Through it all we remained focused on controlling what we could control, stayed on strategy and strengthened our foundation for future growth."

In the letter to staff, newly-appointed CEO Chriss said the decision was made to "right-size" the company through both direct cuts and the elimination of open roles throughout the year. The staff that will be affected are expected to be notified by the end of the week.

In the early stages of US trading, the shares of UPS declined up to 7.6%. UPS, having witnessed a 9.3 per cent decrease in annual sales, anticipates a modest upswing of as little as 1.1 per cent in 2024. The overall decline of 7.5 per cent in fourth-quarter delivery volumes is attributed to soft demand in both Europe and the United States.

The company also posted the letter to its website after the market closed. Paypal's shares ended the day down 0.13%.

In November, Chriss said he expected to increase revenue outside of purely transaction-related volume and pledged to turn the fintech firm leaner by reducing its cost base.

Though the announcement had helped rally the stock after third-quarter results, analysts remained focused on PayPal's margins in recent quarters.

PayPal's low-margin business products have risen strongly while growth in its branded products has slowed due to increased pressure from competitors such as Apple, as per Reuters report.

Investors hope Chriss, who was previously a senior executive at software company Intuit, will revive PayPal's stock. It fell nearly 14 per cent last year and missed a broader sector-wide rebound in high-growth technology shares.

Last week, the payments firm announced it was launching new artificial intelligence-driven products as well as a one-click checkout feature.

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Published: 31 Jan 2024, 07:13 AM IST
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