PayPal, the digital payments company, is laying off 251 employees at its San José headquarters in another round of layoffs, according to a recent government filing.
The cuts are a part of a multiyear restructuring plan led by CEO Enrique Lores to turn around the company’s performance and cut costs while investing more in AI integration.
The company plans to cut 20% of its workforce over the next two to three years, or more than 4,500 jobs to save around $1.5 billion in costs, according to Bloomberg.
PayPal posted net of $1.26 billion in the second quarter, down 12% from the same period a year ago.
The company’s shares have fallen more than 15% over the last 12 months and have been trading around $55.
A slowdown in PayPal’s branded checkout and rising competition from rivals like Apple Pay and Google Pay are among PayPal’s biggest challenges, analysts and company executives have said.
The company is investing $400 million to improve and grow branded checkout this year.
PayPal has attributed the slowdown partly to the “K-shaped economy,” in which wealthier Americans see their incomes rise while lower-income Americans struggle financially. PayPal has many middle-income customers and some lower-income customers, so a pullback in spending affects use of its payments platform.
In February, PayPal let go of its previous chief executive, who had been working to fix the problem, but the company said his “pace of change and execution” over two years didn’t meet the board’s expectations.
The company, which was founded under a different name in 1998, has seen growth in other areas. It owns Venmo, a payments platform especially popular among young people. PayPal also provides consumers with a Buy Now, Pay Later service so they can split the payment for items they buy over a longer period of time.
In July, financial services platform Stripe and private equity firm Advent International made a takeover offer valued at more than $50 billion, but are said to have abandoned their pursuit, according to Bloomberg.
Paypal joins a series of tech companies in the Silicon Valley cutting jobs as they focus on AI.
In late August, Apple announced a rare layoff of nearly 150 employees in machine learning and software engineering departments. Meta, Snap, Block, Oracle and Amazon have also announced layoffs this year as they focus more on AI investments.
Tech companies have been citing various reasons for layoffs, including prioritizing investments in artificial intelligence. As workers use AI-powered tools to generate code, words and other content, some executives have said they don’t need as many employees.
From January to May, U.S. technology companies announced 123,653 cuts, up 66% from the same period in 2025, according to a June report from global outplacement and executive coaching firm Challenger, Gray & Christmas.
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