PayPal’s new CEO David Marcus began a reorganization effort in June to simplify he company’s structure around a mobile theme. Well, today we’re learning about the exact cost of the shift on PayPal’s workforce.
Marcus said in a blog post Monday that PayPal will shed 325 full-time product and technology employees and is letting go of 120 contractors around the world. The restructuring is expected to cost $15 million in the fourth quarter in one time severance costs.
Marcus said the cuts were necessary as PayPal reorganized from nine products groups down to one. The goal is to build a more unified and simple experience for its 117 million customers across different products. Marcus, who joined PayPal through eBay’s acquisition of mobile payment startup Zong, has set about rebuilding PayPal around mobile, to accentuate the need for simplicity and speed.
This isn’t the first we’ve heard about layoffs at PayPal. Some notable recent departures include Mok Oh, PayPal’s chief scientists, who tendered his resignation earlier this month. The company has been doing well with revenue up 23 percent in the most recent quarter to $1.4 billion. But Marcus feels like the company’s too bloated and needs to get more nimble. I think it makes sense as PayPal takes on more competitors like Square and rolls out its in-store payment initiative.