New PayPal CEO signals job cuts, targets $1.5 billion in cost savings

PayPal is preparing to reduce costs and potentially cut jobs as newly appointed chief executive Enrique Lores launches a turnaround effort aimed at simplifying operations and improving long-term growth.

The company said it is targeting at least $1.5 billion in savings over the next two to three years, according to a statement cited by Bloomberg and published by The Business Times. The savings initiative comes as PayPal faces mounting competitive pressure across the digital payments industry.

Lores, who took over as chief executive in March, has already begun restructuring parts of the organisation and reshaping senior leadership during his first months in the role.

New leadership begins operational overhaul

Last week, PayPal reorganised several business divisions and appointed senior executives Frank Keller, Alexis Sowa and Jeff Pomeroy to key leadership positions.

Keller was named president of checkout solutions, Sowa became interim head of consumer financial services, and Pomeroy was appointed interim lead of payment services.

In a company presentation on Tuesday, Lores said he had identified opportunities to simplify PayPal’s structure and lower operational costs shortly after assuming leadership.

“We are taking deliberate steps to sharpen our strategy, simplify our organisation, and improve both our growth trajectory and cost structure,” Lores said in the statement cited by Bloomberg.

He added that part of the savings generated through restructuring would be reinvested into modernising the company’s technology systems.

Fintech sector faces growing pressure

The latest measures highlight increasing strain across the financial technology industry as companies confront slowing growth, rising competition and investor demands for stronger profitability.

PayPal was once among the dominant pioneers in digital payments, but the company has struggled in recent years against newer and faster-growing rivals including Stripe, Adyen, Apple’s Apple Pay and Klarna.

Bloomberg reported that former chief executive Alex Chriss had focused heavily on innovation during his tenure, but chief financial officer Jamie Miller acknowledged that execution had fallen short of expectations.

Several fintech firms have also announced workforce reductions this year.

Coinbase said on Tuesday it would cut around 14% of its workforce, or roughly 700 employees. Earlier in the year, Block announced plans to eliminate about 4,000 jobs.

Quarterly results exceed analyst expectations

PayPal’s restructuring plans were announced alongside first-quarter financial results that surpassed analyst forecasts in several areas.

Key financial and operational figures

• Targeted savings: At least $1.5 billion over two to three years
• First-quarter adjusted earnings per share: $1.34
• Analyst estimate for adjusted EPS: $1.27
• Transaction margin dollars: $3.81 billion
• Consensus estimate for transaction margin dollars: $3.67 billion
• Venmo payment volume growth: 14%
• Online branded checkout growth: 2%

The company reiterated its full-year guidance and said adjusted earnings per share are expected to range from a low-single-digit decline to slightly positive growth compared with last year’s $5.31.

Transaction margin dollars, a metric tracking earnings from payment processing after expenses, rose 3% in the first quarter to $3.81 billion.

Venmo emerges as growth bright spot

One of the stronger performers during the quarter was PayPal’s consumer-focused payments platform Venmo, which posted a 14% increase in total payment volume.

However, the company’s core online branded checkout business continued to show slower momentum, with growth of just 2% during the same period.

The contrast highlights the broader challenge facing PayPal as it attempts to revive growth while defending market share in an increasingly crowded fintech market.

Lores’ early restructuring moves suggest the company is prioritising operational efficiency and technology investment as it seeks to reposition itself for longer-term competitiveness in global digital payments.